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/raid1/www/Hosts/bankrupt/TCR_Public/070405.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, April 5, 2007, Vol. 11, No. 81 Headlines ACA ABS: Moody's Rates $22.5 Million Class C Notes at Ba2 ACCEPTANCE INSURANCE: Plan-Filing Period Extended to August 9 ACCREDITED HOME: Closes $230 Million Farallon Capital Financing ACE SECURITIES: Moody's Reviews Ratings and May Downgrade AMCON DISTRIBUTING: Dec. 31 Balance Sheet Upside-Down by $573,800 AMERICAN HOME: Moody's Rates Class II-M-5 Notes at Ba2 AMERICAN HOME: Moody's Puts Low-B Ratings on 2 Note Classes AMERICAST TECH: Likely Debt Financed Buy Cues S&P's Negative Watch AMR CORP: Furnishes Update on Efforts to Strengthen Balance Sheet ANITA EVANS: Case Summary & 12 Largest Unsecured Creditors APIDOS CDO: Moody's Rates $12 Million Class D Notes at Ba2 ARLINGTON STREET: Moody's Junks Rating on $37 Mil. Class B Notes AURIGA CDO: Moody's Rates $22.5 Mil. Class I Junior Notes at Ba2 AVANEX CORP: Incurs $8.6 Million Net Loss in Qtr. Ended Dec. 31 BEAR STEARNS: Fitch Lifts Rating on Class L Certs. to BB- from B+ BILLING SERVICES: S&P Retains Negative CreditWatch on Ratings BRAINTECH INC: Smythe Ratcliffe Raises Going Concern Doubt BRIGHAM EXPLORATION: Prices $35 Million Add-On to 9-5/8% Sr. Notes BRODER BROS: Weak Operating Results Cue S&P's Negative Outlook BROWNWOOD HOSPITALITY: Voluntary Chapter 11 Case Summary CALYPTE BIOMEDICAL: Inks Subscription Pacts with Four Investors CELSIA TECHNOLOGIES: Low Revenues, Deficit Cue Going Concern Doubt CENTRAL VERMONT: Earns $18.4 Million in Year Ended December 31 CKE RESTAURANTS: Earns $50.2 Million in Fiscal Year Ended Jan. 31 CONSTRUCTION COMPLIANCE: Case Summary & 20 Largest Creditors CREDIT SUISSE: Moody's Junks Rating on $12.6 Mil. Class S Certs. CREDIT SUISSE: Moody's Rates $31.7 Million Class L Certs. At Ba1 DEAN FOODS: Moody's Cuts Corporate Family Rating to Ba3 from Ba1 DIGITAL RECORDERS: Losses and Deficit Cue Going Concern Doubt DIRECTV HOLDINGS: S&P Lifts Rating on $2 Bil. Facilities to BB+ DOV PHARMA: PricewaterhouseCoopers Raises Going Concern Doubt EDDIE BAUER: BDO Siedman Expresses Going Concern Doubt EXCO RESOURCES: Closes $1.5 Billion Vernon & Ansley Acquisition FAIRPOINT COMM: 2006 Fourth Quarter Earnings Lowers to $3.8 Mil. FIRST HORIZON: Fitch Puts Low-B Ratings on Class B-4 & B-5 Certs. FIRST HORIZON: Fitch Puts Low-B Ratings on 2 Certificate Classes FIRST HORIZON: Fitch Puts Low-B Ratings on Class B-4 & B-5 Certs. FONTAINEBLEAU HOLDINGS: Moody's Places Corp. Family Rating at B2 GIBRALTAR LIMITED: Moody's to Withdraw Ratings on 5 Note Classes GLEN DEVELOPMENT: General Unsecured Creditors May Get Full Payment GRAMERCY COURT: Case Summary & 17 Largest Unsecured Creditors HERBALIFE LTD: Whitney Bid Rejection Cues S&P to Retain Watch HEXCEL CORP: Good Performance Cues Moody's to Upgrade Ratings HOLYOKE HOSPITAL: Moody's Holds Ba1 Rating on $11.4 Million Bonds INTEGRATED ALARM: Closes Merger Transaction with Protection One INTEGRATED ALARM: Merger Prompts Moody's to Withdraw Ratings JEAN COUTU: Inks Settlement Agreement with 8-1/2% Noteholders JORDAN INDUSTRIES: Ernst & Young Raises Going Concern Doubt KEPLER HOLDINGS: Moody's Rates $200 Million Senior facility at Ba2 LAND O'LAKES: Earns $44.5 Million in Quarter Ended December 31 MALDEN MILLS: Court Converts Chap. 11 Case to Chap. 7 Liquidation MATRITECH INC: Losses Cue PwC to Raise Going Concern Doubt METCARE RX: Case Summary & 20 Largest Unsecured Creditors METROLOGIC INSTRUMENTS: Moody's Cuts Corporate Family Rating to B3 MKT INC: Case Summary & 20 Largest Unsecured Creditors MORGAN STANLEY: Moody's Holds Ba1 Rating on Class N-SDF Certs. NAKOMA LAND: Trustee Taps CB Richard as Real Estate Broker NATIONAL GAS: Chapter 11 Trustee Hires GSC as Energy Consultant NBO SYSTEMS: Tanner LC Raises Going Concern Doubt NEFF CORP: Lightyear Merger Deal Prompts S&P's Negative Watch NEFF RENTAL: Neff Corp/Capital Deal Cues Moody's to Review Ratings OMEGA HEALTHCARE: Closes Public Offering of 7.13 Million Shares PAETEC CORP: Dec. 31 Balance Sheet Upside-Down by $93 Million PROTECTION ONE: Closes Merger Transaction with Integrated Alarm PROTECTION ONE: Merger Cues Moody's to Hold B2 Corp. Family Rating ROBECO CDO: Moody's Pares Rating on Class B-2 Notes to B1 from Ba2 ROSEDALE MEDICAL: Case Summary & Five Largest Unsecured Creditors SACO I: S&P Puts Default Rating on 2004-1 Class B-2 Loans SAMHO TOUR: Case Summary & 20 Largest Unsecured Creditors SANDRA ROTHMAN: Voluntary Chapter 11 Case Summary SGP ACQUISITION: Plan Confirmation Hearing Set for April 11 SOLO CUP: Posts $373.2 Million Net Loss in Year Ended Dec. 31 SPECTRUM SIGNAL: Gets Going Concern Qualification from KPMG LLP SPECTRUM SIGNAL: Restates Financial Results for Two Fiscal Years SYNIVERSE TECH: Increased Debt Cues Moody's Negative Outlook TABS 2007-7: Moody's Rates $32.5 Million Secured Notes at Ba2 TAHOMA CDO: Moody's Rates $5 Million Class E Senior Notes at Ba1 TARGETED GENETICS: Ernst & Young Raises Going Concern Doubt TECH DATA: Earns $36.1 Million in Quarter Ended December 31 TK ALUMINUM: Unit Launches Tender Offer of EUR35 Mil. Senior Notes TRIMARAN VII: Moody's Rates $12.5 Million Class B-2L Notes at Ba2 TUPPERWARE BRANDS: Loan Reduction Prompts S&P to Hold BB Rating VANGUARD CAR: Moody's Holds Corporate Family Rating at B1 VCA ANTECH: Earns $19 Million in Quarter Ended December 31 VIKING SYSTEMS: Squar Milner Expresses Going Concern Doubt WACHOVIA BANK: Moody's Holds Low-B Ratings on 11 Cert. Classes WACHOVIA BANK: Moody's Holds Low-B Ratings on Class K & RC Certs. WHITE BIRCH: Moody's Rates Proposed $550 Mil. Senior Loan at B2 WHX CORPORATION: Unit Amends Wachovia & Steel Loan Agreements WORLD HEART: Chronic Losses Cue PwC to Raise Going Concern Doubt WORNICK CO: Financial Filing Delay Cues S&P to Junk Ratings XERIUM TECHNOLOGIES: Earns $3.2 Million in Quarter Ended Dec. 31 * Edward Zaelke Named Managing Partner of Chadbourne & Parke ********* ACA ABS: Moody's Rates $22.5 Million Class C Notes at Ba2 --------------------------------------------------------- Moody's Investors Service assigned ratings to notes issued by ACA ABS 2007-1, Ltd.: * Aaa to the $930,000,000 Class A1S Variable Funding Senior Secured Floating Rate Notes Due 2047; * Aaa to the $125,000,000 Class A1J Senior Secured Floating Rate Notes Due 2047; * Aa2 to the $198,000,000 Class A2 Senior Secured Floating Rate Notes Due 2047; * A2 to the $72,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2047; * Baa1 to the $30,000,000 Class B1 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047; * Baa2 to the $40,000,000 Class B2 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047; * Baa3 to the $22,500,000 Class B3 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047; and * Ba2 to the $22,500,000 Class C Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of RMBS Securities, CMBS Securities and other Asset-Backed Securities and Synthetic Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. ACA Management , L.L.C. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. ACCEPTANCE INSURANCE: Plan-Filing Period Extended to August 9 ------------------------------------------------------------- The Honorable Timothy J. Mahoney of the U.S. Bankruptcy Court for the District of Nebraska in Omaha further extended Acceptance Insurance Companies Inc.'s exclusive right: a) to file a Chapter 11 plan until Aug. 9, 2007; b) to solicit acceptances of that plan until Oct. 9, 2007. The Debtors' exclusive period to file a plan expired on Feb. 9, 2007. The Debtor told the Court that a further extension of the exclusivity periods is necessary to allow completion of the liquidation of its assets. The Debtor also continues to diligently manage and resolve claims within Acceptance Insurance Company, a subsidiary of the Debtor and one of the Debtor's principal assets, in an effort to maximize the value of AIC for the benefit of the Debtor's creditors. The claims resolution process within AIC is not yet at a stage that will permit the Debtor to structure an optimal plan of reorganization. The Debtor's takings claim against the United States of America is currently on appeal to the Federal Circuit Court of Appeals based on a jurisdictional issue. A decision on the merits of the case has not been issued. Both the Debtor and AIC are currently engaged in litigation with Granite Reinsurance Ltd. regarding a $10 million claim filed against the Debtor in it bankruptcy case, a $10 million adversary proceeding filed by Granite Re against AIC and a $6 million adversary proceeding filed by the Debtor against Granite Re. All of the proceedings in the Granite Re Litigation have been procedurally consolidated and are pending in this Court. The Committee has intervened in the Granite Re Litigation in order to represent the interests of their constituents. Once the Granite Re Litigation has been resolved and the run-off from AIC's business has progressed to the point that AIC's assets can be sold, the Debtor will be in a position to propose a plan of liquidation providing for the distribution of the Debtor's assets to its creditors. The Debtor revealed that the Committee has consented to the extension. Headquartered in Council Bluffs, Iowa, Acceptance Insurance Companies Inc. -- http://www.aicins.com/-- owns, either directly or indirectly, several companies, one of which is an insurance company that accounts for substantially all of the business operations and assets of the corporate groups. The company filed for chapter 11 protection on Jan. 7, 2005 (Bankr. D. Nebr. Case No. 05-80059). The Debtor's affiliates -- Acceptance Insurance Services Inc. and American Agrisurance Inc. -- filed separate chapter 7 petitions (Bankr. D. Nebr. Case Nos. 05-80056 and 05-80058) on Jan. 7, 2005. John J. Jolley, Esq., at Kutak Rock LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $33,069,446 in total assets and $137,120,541 in total debts. ACCREDITED HOME: Closes $230 Million Farallon Capital Financing --------------------------------------------------------------- Accredited Home Lenders Holding Co. has closed the financing transaction with Farallon Capital Management(R), L.L.C. and related entities. Accredited also provided an update on the company's liquidity, the company's business, developments with respect to the company's independent auditors, and other matters. Farallon Financing The company has closed a $230 million term loan facility provided by Farallon. The loans under the facility have a five-year term and may be repaid by Accredited at any time over the life of the loan, subject to certain conditions and prepayment fees. The loans are secured by a pledge of certain subsidiaries, including all domestic subsidiaries, and a security interest over certain assets. In connection with the financing, Farallon received warrants to acquire approximately 3.23 million shares of the Company's stock at an exercise price of $10 per share. The warrants will expire in ten years from the issuance date. As contemplated, Farallon also was granted certain preemptive rights, registration rights and board observer rights. Proceeds of the term loan can be used for general working capital, the funding of mortgage loans, and other corporate needs. Farallon manages equity capital for institutions and high net worth individuals and is headquartered in San Francisco, California. Farallon is a registered investment advisor with the United States Securities and Exchange Commission. Other Liquidity Developments In addition, Accredited reported these developments regarding its available financing capacity: a) Accredited has obtained a new $500 million warehouse facility from a large commercial bank and renewed one of its existing warehouse facilities with an investment banking firm for $600 million. The company is also in discussions with another investment banking firm regarding the possible renewal of an existing $650 million warehouse facility. b) As a result of the sale of $2.7 billion of loans and the closing of the Farallon term loan, Accredited repaid the majority of its warehouse facilities. The company terminated four warehouse lines after repayment of these facilities in full. In addition, Accredited has received further waivers of certain covenants on three of its warehouse facilities, which have a combined total of approximately $100 million in outstanding advances at March 31, 2007. Accredited has agreed with these lenders that Accredited will not draw down additional borrowings under the facilities at the current time. The company plans to sell much of the collateral in these warehouse lines in the ordinary course of business, as described below in the "Loan Dispositions" section. After the loan sales are completed and these three facilities are repaid in full, these facilities may be terminated or renewed. Certain of these lenders have indicated a willingness to renew their facilities with the company. c) In addition, Accredited has sold all the mortgage loans collateralizing its asset-backed commercial paper program and has collateralized the remaining $80 million in commercial paper notes outstanding with cash. The company has agreed with the swap counterparties supporting the asset-backed commercial paper program to discontinue current use of the commercial paper conduit. Accredited will consider reactivating or terminating the program depending upon future market conditions and the availability of various credit providers. If the program is terminated, the company intends to repay the commercial paper outstanding with the cash held as collateral in the conduit. As a result of the developments outlined above, the company has approximately $350 million of available cash on hand at March 31, 2007, not including the cash collateralizing the asset-backed commercial paper program. Originations The company originated approximately $1.8 billion of mortgage loans in the U.S. and Canada during the quarter ended March 31, 2007. Loan Dispositions The company closed a $760 million asset-backed, on-balance sheet securitization on Jan. 30, 2007. The company intends to evaluate additional securitizations as an alternative to whole loan sales in the future. Accredited sold approximately $800 million and, as previously disclosed, $2.7 billion of mortgage loans for cash in the first quarter of 2007. The approximately $800 million sold at a weighted average net price of 100.63%. The $2.7 billion sale in March included substantially all performing and non-performing loans in inventory on March 6, 2007 and will result in a pre-tax charge of approximately $160 million. In March, the company signed a $400 million forward sale agreement, priced at 100.625%, for loans to be delivered in the second quarter. Company Outlook "We are pleased with the closing of the term loan with Farallon," Chairman and Chief Executive Officer James A. Konrath remarked. "The loan is a key component of our plan to improve the company's liquidity in order to maneuver in a non-prime mortgage market that has become even more turbulent than the market we described in our conference call on Feb. 14, 2007. The Farallon loan, along with the restructuring of our warehouse financing capacity and recent loan dispositions, provides Accredited with greater flexibility in originating loans, securitizing ongoing loan production, and pursuing various strategic options." Auditors' Resignation Accredited is reviewing the potential impact of Grant Thornton LLP's resignation on a variety of issues, including the obligation of the company to provide Regulation AB certifications with respect to its securitizations, requirements under certain state and provincial regulatory licenses to provide annual audited financial statements, and the effect of the additional delay in completing its 2006 audit on its NASDAQ listing status, among others. Accredited has contacted most state regulatory authorities regarding the delay in filing its Annual Report on Form 10-K. The company has been orally told by the regulatory authorities in affected states that they will allow the company additional time to complete its year-end audit. The company intends to continue its origination operations during this period. Pursuing Strategic Options Accredited is continuing to work with its financial and legal advisors to explore various strategic options. Strategic options could include, but are not limited to, raising additional capital, a merger, or other strategic transaction. There can be no assurance that the company's pursuit of strategic options will result in any transactions being consummated. About Accredited Home Lenders Headquartered in San Diego, California, Accredited Home Lenders Holding Co. (NASDAQ:LEND) -- http://www.accredhome.com/-- is a mortgage company operating throughout the U.S. and in Canada. Founded in 1990, the company originates, finances, securitizes, services, and sells non-prime mortgage loans secured by residential real estate. ACE SECURITIES: Moody's Reviews Ratings and May Downgrade --------------------------------------------------------- Moody's Investors Service has placed under review for possible upgrade thirteen certificates from four securitizations done by ACE Securities Corp. in 2003. Moody's also placed under review for possible downgrade four certificates from three deals closed in 2002 and 2003. The underlying collateral for these securitizations consists of fixed-rate and adjustable-rate subprime mortgage loans. The actions are based on the fact that the bonds' current credit enhancement levels, including excess spread where applicable, are either high or low compared to the current projected loss numbers for the current rating level. These are the rating actions: * ACE Securities Corp. Home Equity Loan Trust * Review for possible upgrade: -- Series 2003-FM1, Class M-1, current rating Aa2, under review for possible upgrade; -- Series 2003-FM1, Class M-2, current rating A2, under review for possible upgrade; -- Series 2003-FM1, Class M-3, current rating A3, under review for possible upgrade; -- Series 2003-FM1, Class M-4, current rating Baa1, under review for possible upgrade; -- Series 2003-OP1, Class M-1, current rating Aa2, under review for possible upgrade; -- Series 2003-OP1, Class M-2, current rating A2, under review for possible upgrade; -- Series 2003-OP1, Class M-3, current rating A3, under review for possible upgrade; -- Series 2003-OP1, Class M-4, current rating Baa1, under review for possible upgrade; -- Series 2003-HS1, Class M-1, current rating Aa2, under review for possible upgrade; -- Series 2003-HS1, Class M-2, current rating A2, under review for possible upgrade; -- Series 2003-HS1, Class M-3, current rating A3, under review for possible upgrade; -- Series 2003-HE1, Class M-1, current rating Aa2, under review for possible upgrade; and -- Series 2003-HE1, Class M-2, current rating A2, under review for possible upgrade. * Review for possible downgrade: -- Series 2002-HE1, Class M-3, current rating B2, under review for possible downgrade; -- Series 2002-HE1, Class M-4, current rating Ca, under review for possible downgrade; -- Series 2003-HE1, Class M-6, current rating Baa3, under review for possible downgrade; and -- Series 2003-OP1, Class B, current rating Ba2, under review for possible downgrade. AMCON DISTRIBUTING: Dec. 31 Balance Sheet Upside-Down by $573,800 ----------------------------------------------------------------- AMCON Distributing Company's balance sheet at Dec. 31, 2006, showed $93,053,989 in total assets and $93,627,789 in total liabilities, resulting in a $573,800 stockholders' deficit. The company's stockholders' deficit at Sept. 30, 2006, stood at $1,747,069. For the fiscal first quarter ended Dec. 31, 2006, the company reported $1,170,269 of net income on $209,366,149 of sales, compared with a $1,261,801 net loss on $198,217,081 of sales in the prior year period. Sale of Hawaiian Natural On Nov. 20, 2006, all of the operating assets of Hawaiian Natural Water Company, Inc., were sold for approximately $3.8 million in cash, plus the buyer's assumption of all operating and capital leases. The significant operating assets consisted of accounts receivable, inventory, furniture and fixtures, intellectual property and all of its bottling equipment. In connection with the sale, the company has recorded a $1.6 million pretax gain on disposal of discontinued operations in the first quarter of fiscal 2007. Hawaiian Natural, which was headquartered in Pearl City, Hawaii, was part of the company's former beverage segment. Hawaiian Natural bottled, marketed and distributed Hawaiian natural artesian water, purified water and other limited production co-packaged products in Hawaii and the mainland. Full-text copies of the companies fiscal first quarter financials are available for free at http://ResearchArchives.com/t/s?1cc1 About AMCON Distributing AMCON Distributing Company (AMEX:DIT) -- http://www.amcon.com/-- is a wholesale distributor of consumer products in the Great Plains and Rocky Mountain regions. In addition, the company operates 13 retail health food stores in Florida and the Midwest. The company has five distribution centers that sell approximately 14,000 different consumer products, including cigarettes and tobacco products, candy and other confectionery, beverages, groceries, paper products, health and beauty care products, frozen and chilled products, and institutional food service products. AMCON also operates six Chamberlin's Market & Cafe retail health food stores in Florida and seven Akin's Natural Foods Market in the Midwest. These stores carry natural supplements, groceries, health and beauty care products and other food items. AMERICAN HOME: Moody's Rates Class II-M-5 Notes at Ba2 ------------------------------------------------------ Moody's Investors Service has assigned an Aaa rating to the Class I-1A, I-2A, I-3A and II-A notes issued by American Home Mortgage Investment Trust 2007-A, a Aa1 rating to the Class III-A notes, and ratings ranging from Aa2 to Ba2 to the subordinate notes in the deal. The group I notes are backed by adjustable-rate and fixed rate first lien residential mortgage loans. The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination, overcollateralization, excess spread, an interest rate cap, and an interest rate swap. Moody's expects collateral losses in group I to range from 1.25% to 1.45%. The group II notes are backed by fixed-rate closed-end junior lien residential mortgage loans. The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination, overcollateralization, excess spread, an interest rate cap, and an interest rate swap. Moody's expects collateral losses in group II to range from 7.75% to 8.25%. The group III notes are backed by home equity line of credit residential mortgage loans. The ratings are based primarily on the financial guaranty insurance policy provided by Assured Guaranty Corp, whose insurance financial strength is rated Aa1 by Moody's. The notes also benefit from excess spread and overcollateralization. Moody's expects collateral losses to range from 5% to 5.5%. American Home Mortgage Servicing, Inc. will service the mortgage loans in the transaction. Wells Fargo Bank N.A. will act as master servicer for the loans in groups I and II. GMAC Mortgage, LLC. will act as back-up servicer for the loans in group III. Moody's has assigned Wells Fargo Bank N.A. its top servicer quality rating of SQ1 as a master servicer of residential mortgage loans. These are the rating actions: * American Home Mortgage Investment Trust 2007-A * Mortgage-Backed Notes, Series 2007-A Class I-1A, Assigned Aaa Class I-2A, Assigned Aaa Class I-3A-1, Assigned Aaa Class I-3A-2, Assigned Aaa Class II-A, Assigned Aaa Class III-A, Assigned Aa1 Class I-M-1, Assigned Aa3 Class II-M-1, Assigned Aa2 Class II-M-2, Assigned A3 Class II-M-3, Assigned Baa2 Class II-M-4, Assigned Baa3 Class II-M-5, Assigned Ba2 AMERICAN HOME: Moody's Puts Low-B Ratings on 2 Note Classes ----------------------------------------------------------- Moody's Investors Service has assigned an Aaa rating to the senior notes issued by American Home Mortgage Investment Trust 2007-SD1 and ratings ranging from Aa2 to B2 to the subordinate notes in the transaction. The securitization is backed by weaker-than-average scratch and dent residential mortgages. The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination. The notes also benefit from residual cash flow from the American Home Mortgage Investment Trust 2007-A transaction. Moody's expects collateral losses to range from 15.85% to 16.35%. American Home Mortgage Servicing, Inc. will service the mortgage loans in the transaction and Wells Fargo Bank N.A. will act as master servicer. Moody's has assigned Wells Fargo Bank N.A. its top servicer quality rating of SQ1 as a master servicer of residential mortgage loans. These are the rating actions: * American Home Mortgage Investment Trust 2007-SD1 * Mortgage-Backed Notes, Series 2007-SD1 Class IV-A, Assigned Aaa Class IV-M-1, Assigned Aa2 Class IV-M-2, Assigned A2 Class IV-M-3, Assigned Baa2 Class IV-M-4, Assigned Ba2 Class IV-M-5, Assigned B2 AMERICAST TECH: Likely Debt Financed Buy Cues S&P's Negative Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B-' rating on AmeriCast Technologies Inc.'s senior unsecured notes on CreditWatch with negative implications, reflecting the possibility that the company might finance its pending acquisition of Atlas Castings and Technology with senior secured debt, and as a result, further disadvantage the currently outstanding senior unsecured notes. S&P 'B' corporate credit rating on AmeriCast was affirmed and not placed on CreditWatch. The outlook is stable. S&P will resolve the CreditWatch listing after reviewing AmeriCast's capital structure upon completion of the acquisition or its cancellation. Standard & Poor's could lower the rating on senior unsecured notes one notch to 'CCC+'. Alternatively, we could affirm the rating at 'B-'. AMR CORP: Furnishes Update on Efforts to Strengthen Balance Sheet ----------------------------------------------------------------- AMR Corporation, the parent company of American Airlines, Inc., provided an update on actions taken in the first quarter of 2007 as part of its ongoing efforts to strengthen its balance sheet and build a stronger financial foundation. American Airlines has paid in full the $285 million principal balance of its senior secured revolving credit facility, which had been fully drawn since its establishment in December 2004. AMR's $444 million term loan facility remains outstanding. The company said that the revolving credit facility may be redrawn, subject to certain conditions, and repaid from time to time depending on various factors, such as economic and industry conditions and the company's financial condition. American Eagle Airlines, Inc., its wholly owned subsidiary, has prepaid $79 million in principal amount of aircraft debt. The prepayment, which occurred in February, is incremental to AMR's $1.3 billion in scheduled principal payments in 2007. AMR anticipates ending the first quarter of 2007 with $5.8 billion in cash and short-term investments, including a restricted balance of nearly $500 million, compared to a cash and short-term investment balance of $4.8 billion, including a restricted balance of $510 million, in the first quarter of 2006. AMR also said that it expects to complete by mid-April the refinancing of $350 million in municipal bonds that originally were issued in 1990 to help fund the development of American's Alliance Maintenance and Engineering Base in Fort Worth, Texas. The closing of the transaction is subject to certain government approvals. The refinanced bonds, to be issued by AllianceAirport Authority, Inc., will have a blended interest rate of 5.46%, down from a rate of 7.5% in the current bonds, and a final maturity of Dec. 1, 2029. AMR estimates that by paying down the revolving credit facility balance, prepaying the aircraft debt and refinancing the maintenance facility bonds, as described above, it will eliminate $15 million of its annual net interest expense. "The company believes that these actions illustrate its continued progress in strengthening its balance sheet, which is an important component of the company's Turnaround Plan that has helped to position the company for long-term success," Thomas W. Horton, executive vice president of finance and planning and chief financial officer of AMR said. "While there is more work to do, the company is building a stronger company by reducing debt and increasing liquidity while continuing to find ways to grow revenue and reduce costs." AMR's balance sheet improvement include: * more than $1.1 billion, raised through three equity issuances in the past 17 months, including the sale of 13 million new shares in January that raised $500 million; * reduced total debt, which includes the principal amount of airport facility tax-exempt bonds and the present value of aircraft operating lease obligations, to $18.4 billion at the end of the fourth quarter of 2006, compared to $20.1 billion a year earlier, the company expects to end the first quarter of 2007 with total debt of $17.6 billion; * reduced net debt, which is defined as total debt less unrestricted cash and short-term investments, from $16.3 billion at the end of 2005 to $13.6 billion at the end of 2006, the Company expects to end the first quarter of 2007 with net debt of $12.3 billion. About AMR Corp. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines, Inc., -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to approximately 150 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines, Inc. and Executive Airlines, Inc. and does business as "American Eagle." American Beacon Advisors, Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter on March 29, 2007, Moody's Investors Service raised the debt ratings of AMR Corporation and its subsidiaries, including the corporate family rating, to 'B2'. Moody's also raised the ratings of most tranches of AMR's Enhanced Equipment Trust Certificates, affirmed the SGL-2 rating, and increased the Loss Given Default rate to 30-LGD3 on the secured debt and to 83-LGD5 on the senior unsecured debt. The outlook is stable. ANITA EVANS: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Anita Yvonne Evans aka Anita Yvonne Jackson 4380 Portchester Way Snellville, GA 30039 Bankruptcy Case No.: 07-65008 Chapter 11 Petition Date: March 30, 2007 Court: Northern District of Georgia (Atlanta) Judge: Mary Grace Diehl Debtor's Counsel: Jerry A. Daniels, Esq. Suite 300 175 Gwinnett Drive Lawrenceville, GA 30045 Tel: (770) 962-4070 Total Assets: $1,118,509 Total Debts: $1,088,837 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Daimler Chrysler Financial $21,000 Services c/o MacDowell & Associates P.O. Box 450849 Atlanta, GA 30345 G.M.A.C. 2004 Chevrolet $16,915 P.O. Box 3100 Impala Midland, TX 79702 value of security: $10,925 Christopher James $17,422 c/o William F. Rucker, Esq. 215 North McDonough Street Decatur, GA 30030 Rhodes, Inc. value of $8,311 security: $1,500 Washington Mutual credit card $5,861 purchases Capital One credit card $5,000 purchases U.S. Department of Education student loan $5,000 Citifinancial Services, Inc. loan $4,655 Bank of America VISA credit card $3,984 purchases S.S.T., Inc. credit card $1,123 H.F.C. loan $988 H.S.B.C. Card Services credit card $400 purchases APIDOS CDO: Moody's Rates $12 Million Class D Notes at Ba2 ---------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Apidos CDO V: * Aaa to the $130,000,000 Class A-1 Senior Secured Floating Rate Notes due 2021; * Aaa to the $150,000,000 Class A-1-S Senior Secured Floating Rate Notes due 2021; * Aa1 to the $17,000,000 Class A-1-J Senior Secured Floating Rate Notes due 2021; * Aa2 to the $19,000,000 Class A-2 Senior Secured Floating Rate Notes due 2021; * A2 to the $21,000,000 Class B Senior Secured Deferrable Floating Rate Notes due 2021; * Baa2 to the $18,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2021 and * Ba2 to the $12,000,000 Class D Secured Deferrable Floating Rate Notes due 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primariy of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Apidos Capital Management, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. ARLINGTON STREET: Moody's Junks Rating on $37 Mil. Class B Notes ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings of the following class of notes issued by Arlington Street CDO Ltd., a collateralized debt obligation issuer: * The $37,000,000 Class B Fixed Rate Senior Secured Notes Due 2012 -- Prior rating: Caa2, on watch for possible downgrade -- Current rating: Caa3 Moody's noted that the rating action is due to several factors, such as an increasing amount of deferred interest owed to the Class B notes. The Class B Overcollateralization Test and the Class B Interest Coverage Test are also failing, along with the Weighted Average Moody's Rating Test and the Weighted Average Coupon Test. The collateral pool also contains a number of assets that are rated Caa1 or below. AURIGA CDO: Moody's Rates $22.5 Mil. Class I Junior Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Auriga CDO Ltd.: * Aaa to the $975,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2047; * Aaa to the $97,500,000 Class A-2A Second Priority Senior Secured Floating Rate Notes Due 2047; * Aaa to the $48,000,000 Class A-2B Third Priority Senior Secured Floating Rate Notes Due 2047; * Aa2 to the $64,500,000 Class B Fourth Priority Senior Secured Floating Rate Notes Due 2047; * Aa3 to the $63,000,000 Class C Fifth Priority Senior Secured Floating Rate Notes Due 2047; * A2 to the $48,000,000 Class D Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047; * A3 to the $42,000,000 Class E Seventh Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047; * Baa2 to the $51,000,000 Class F Eighth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047; * Baa3 to the $28,500,000 Class G Ninth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047; * Baa3 to the $43,500,000 Class H Tenth Priority Junior Secured Deferrable Floating Rate Notes Due 2047; and * Ba2 to the $22,500,000 Class I Eleventh Priority Junior Secured Deferrable Floating Rate Notes Due 2047. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. 250 Capital, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. AVANEX CORP: Incurs $8.6 Million Net Loss in Qtr. Ended Dec. 31 --------------------------------------------------------------- Avanex Corporation reported a net loss of $8.6 million for the second quarter ended Dec. 31, 2006, compared with a net loss of $18.5 million for the same period ended Dec. 31, 2005. Net revenue in the second quarter of fiscal 2007 was a record $55.6 million, a 54 percent increase over revenue of $36.1 million in the second quarter of the previous year. The increase in net revenue was attributable to an overall increase in demand for the company's products from existing customers. The decrease in net loss was primarily due to the increase in revenue, a corresponding increase in gross profit, and a decrease in interest expense, partly offset by an increase in operating expenses. "The second quarter was exceptionally strong and we are very pleased to report the highest revenue and gross margin in the history of Avanex," said Jo Major, chairman, president and chief executive officer of Avanex. "Our team generated solid revenue growth while significantly improving the financial performance of the company." "In the metro and long haul markets we expect flat market demand in the first half of 2007, due to the delay of certain capacity expansion projects and we anticipate the market to return to growth in the second half of the year," said Major. Gross margin in the second quarter of fiscal 2007 increased to 19%, compared with 8% in the second quarter of fiscal 2006. Marla Sanchez, senior vice president and chief financial officer said, "We are pleased with the significant improvement in gross margin due to the programs we implemented two quarters ago aimed at reducing inventory charges, improving our supply chain, increasing manufacturing yields and managing our product portfolio. Execution of these programs significantly expanded our gross margin and we expect to realize further improvements in our cost structure." Total operating expenses increased to $19.9 million in the current quarter, from $15.6 million in the same period last year. General and administrative expenses increased $5.2 million primarily driven by legal, accounting and consulting due diligence fees of $2.1 million related to a potential acquisition in which Avanex decided not to proceed further, increased share-based compensation expenses of $947,000, unanticipated increase in audit fees of $750,000 related to the year-end audit, unanticipated increase of $800,000 in consulting fees related to Sarbanes-Oxley compliance and other year-end financial close activities, and general increase in employee salaries related to annual salary increases. Interest and other expense decreased by $5.9 million to $308,000 in the three months ended Dec. 31, 2006, from $6.2 million in the three months ended Dec. 31, 2005. These decreases were primarily due to incurring a $4.5 million loss in connection with modifications to the company's 8% senior convertible notes in November 2005, and interest expense on higher principal balances of borrowings in the three month period ended Dec. 31, 2005. At Dec. 31, 2006, the company's balance sheet showed $165.3 million in total assets, $105.9 million in total liabilities, and $59.4 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1cc4 About Avanex Avanex Corporation (NASDAQ: AVNX)-- http://www.avanex.com/-- is a leading global provider of Intelligent Photonic Solutions(TM) to meet the needs of fiber optic communications networks for greater capacity, longer distance transmissions, improved connectivity, higher speeds and lower costs. These solutions enable or enhance optical wavelength multiplexing, dispersion compensation, switching and routing, transmission, amplification, and include network-managed subsystems. Avanex was incorporated in 1997 and is headquartered in Fremont, Calif. * * * This concludes the Troubled Company Reporter's coverage of Avanex Corp. until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. BEAR STEARNS: Fitch Lifts Rating on Class L Certs. to BB- from B+ ----------------------------------------------------------------- Fitch Ratings upgrades Bear Stearns Commercial Mortgage Securities Inc., series 2003-TOP12: -- $30.5 million class B to 'AAA' from 'AA+'; -- $31.9 million class C to 'AA' from 'A'; -- $13.1 million class D to 'AA-' from 'A-'; -- $14.5 million class E to 'A-' from 'BBB+'; -- $7.3 million class F to 'BBB+' from 'BBB'; -- $7.3 million class G to 'BBB' from 'BBB-'; -- $5.8 million class H to 'BBB-' from 'BB+'; -- $5.8 million class J to 'BB+' from 'BB'; -- $2.9 million class K to 'BB' from 'BB-'; and -- $2.9 million class L to 'BB-' from 'B+'. In addition, Fitch affirms these classes: -- $18.5 million class A-1 at 'AAA'; -- $150.6 million class A-2 at 'AAA'; -- $185.9 million class A-3 at 'AAA'; -- $487.3 million class A-4 at 'AAA'; -- Interest only class X-1 at 'AAA'; -- Interest only class X-2 at 'AAA'; -- $2.9 million class M at 'B'; and -- $2.9 million class N at 'B-'. Fitch does not rate the $11.6 million class O. The rating upgrades reflect additional paydown and defeasance since Fitch's last rating action. As of the March 2007 distribution date, the pool has paid down 15.5% to $981.6 million from $1.16 billion at issuance. Eight loans (8.7% of the pool) have been defeased since issuance, including the third largest loan (5.2%), which is also credit assessed. There is currently one specially serviced loan collateralized by a retail center located in Lithia Springs, Georgia. The property has experienced a series of non-monetary defaults due to unauthorized changes in ownership structure. The loan is expected to return to the master servicer. Fitch reviewed the most recent operating data available from the master servicer for the nine non-defeased credit assessed loans (23.5%): West Shore Plaza (6.5%), West Valley Mall (6.3%), Sun Valley Apartments (2.5%), Cedar Knolls Shopping Center (1.9%), 284 Mott Street (1.9%), Eagle Plaza (1.7%), Carriage Way (1%), Deerfield Estates (1%), and Wayne Town Center (0.8%). Based on their stable performance, the loans maintain their investment grade credit assessments. West Valley Mall is collateralized by 621,697 square feet (sq. ft. ) of a 717,573 sf regional mall in Tracy, California. Occupancy as of Sept. 30, 2006 has increased to 96% from 95.9% at issuance. West Shore Plaza is collateralized by 831,439 sf of a 1.1 million sq. ft. regional mall located in Tampa, Florida. As of August 2006 occupancy has increased to 95% from 92.3% at issuance. Sun Valley Apartments is a 306-unit multifamily property located in Florham Park, New Jersey. Occupancy as of January 2007 is 93% compared to 95.1% at issuance. BILLING SERVICES: S&P Retains Negative CreditWatch on Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings, including its 'B+' corporate credit rating, on Glenview, Illinois- based Billing Services Group Ltd. remain on CreditWatch with negative implications, where they were placed on Jan. 23, 2007, following the company's announcement that it was in early stage discussions concerning numerous potential strategic options. It recently was announced that BSG signed a definitive agreement to sell its wireless clearing and financial settlement business to Syniverse Technologies Inc. (BB-/Stable/--) for approximately $290 million. "While the wireless business only accounted for about 24% of BSG's total revenues during 2006, it was the more profitable of the two businesses, contributing more than 40% of EBITDA, and also offered higher growth prospects, given its focus on several underserved markets and increasing roaming activity abroad," said Standard & Poor's credit analyst Ben Bubeck. Still, BSG would be left with a relatively stable, moderately profitable, and cash generative business in North America. Preliminary financing plans for the remaining business point to leverage at approximately 4x. Still, BSG would lose substantial business diversity and its primary growth driver as a result of the sale of the wireless business. The transaction remains contingent upon BSG shareholder approval and regulatory approvals. Standard & Poor's will monitor the progress on the closing of this transaction, and will see whether there are any further planned changes to either BSG's business or financial profile in order to determine the extent to which, if any, our ratings would be affected by this divestiture. BRAINTECH INC: Smythe Ratcliffe Raises Going Concern Doubt ---------------------------------------------------------- Smythe Ratcliffe LLP raised substantial doubt about Braintech Inc.'s ability to continue as a going concern citing recurring losses from operations after auditing the company's financial statements as of Dec. 31, 2006, and 2005. The company had a net loss of $6 million on sales of $1.8 million for the year ended Dec. 31, 2006, as compared with a net loss of $2.7 million on sales of $1.2 million for the year ended Dec. 31, 2005. Braintech's balance sheet as of Dec. 31, 2006, showed total stockholders' deficit of $2.1 million, resulting from total assets of $1.3 million and total liabilities of $3.4 million. The company's balance sheet as of Dec. 31, 2006, also showed strained liquidity with total current assets of $1.3 million available to pay total current liabilities of $1.4 million. Accumulated deficit as of Dec. 31, 2006, stood at $26 million, up from $20 million as of Dec. 31, 2005. Working Capital and Operations As of Dec. 31, 2006, the company had $16,950 in cash and cash equivalents and working capital deficiency of $109,027 and as of Dec. 31, 2005, the company had $522,943 in cash and cash equivalents and a working capital deficiency of $1.5 million. As of Dec. 31, 2006, the company's trade accounts receivable balance was $1.1 million. Subsequent to December 31, all of this balance was received in full. The company's cash position as at March 22, 2007 is about $650,000. The company estimated that, at its current level of operation, its cash expenses are about $200,000 per month. Credits and Debentures On Oct. 23, 2006, the company completed a transaction redeeming all of the remaining secured convertible debentures representing $1.7 million of principal and $393,998 of interest. As of Oct. 23, 2006, the company had obtained letters of credit securing a total of $2.2 million of the Bank Loan and accordingly on Oct. 23, 2006, the company issued 4.3 million common shares, about 6.5 million warrants exercisable at $0.30 and 3.2 million warrants exercisable at $0.50. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1c97 About Braintech Braintech Inc. (OTC BB: BRHI) generates majority of its revenues from the sale of computer software that it developed. Its software sales involved computerized vision systems used for the guidance of industrial robots performing automated assembly, material handling, and part identification and inspection functions. BRIGHAM EXPLORATION: Prices $35 Million Add-On to 9-5/8% Sr. Notes ------------------------------------------------------------------ Brigham Exploration Company has priced a $35 million private placement add-on to its 9-5/8% senior notes due 2014. The notes were priced at 99.50% of their face value to yield 9.721%, and will be issued pursuant to an indenture dated April 20, 2006. Certain of Brigham's subsidiaries will fully and unconditionally guarantee the notes. Brigham intends to use the net proceeds from the offering to repay amounts outstanding under its existing senior credit agreement and for general corporate purposes. Brigham does not anticipate expanding its capital expenditure budget. The notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act. The company plans to offer and issue the notes only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to persons outside the United States pursuant to Regulation S. About Brigham Exploration Headquartered in Austin, Texas, Brigham Exploration Company (Nasdaq: BEXP) -- http://www.bexp3d.com/-- is an independent exploration and production company that applies 3-D seismic imaging and other advanced technologies to systematically explore and develop onshore domestic natural gas and oil provinces. * * * Brigham Exploration Company's 9-5/8% Senior Notes due 2014 carry Moody's Investors Service's 'Caa2' rating and Standard & Poor's 'CCC+' rating. BRODER BROS: Weak Operating Results Cue S&P's Negative Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on printable sportswear distributor Broder Bros Co. to negative from stable. At the same time, Standard & Poor's affirmed its 'B' long-term corporate credit and 'CCC+' unsecured debt ratings on the company. "The outlook revision reflects the company's weaker-than-expected operating results and credit protection measures for the fiscal year ended December 2006," said Standard & Poor's credit analyst Susan Ding. Credit measures have deteriorated as a result of higher debt levels. "The company experienced inventory issues during the fourth quarter ended December 2006, which resulted in lower revenues and EBITDA for the quarter," added Ms. Ding. Operating margins, meanwhile, remained thin at around 6%, in part due to the company's business model as a distributorship, as well as intensely competitive industry conditions. The ratings on Broder Bros Co. reflect the company's highly leveraged financial profile, weak volume growth, integration risk, and the highly competitive operating environment. Broder is the leading U.S. distributor of imprintable sportswear and accessories. BROWNWOOD HOSPITALITY: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Brownwood Hospitality, Inc. 515 East Commerce Street Brownwood, TX 76801 Bankruptcy Case No.: 07-10120 Chapter 11 Petition Date: April 3, 2007 Court: Northern District of Texas (Abilene) Debtor's Counsel: Charles Dick Harris, Esq. P.O. Box 3835 Abilene, TX 79604 Tel: (325) 677-3311 Fax: (325) 677-3314 Total Assets: $3,000,000 Total Debts: $2,817,238 The Debtor did not file a list of its largest unsecured creditors. CALYPTE BIOMEDICAL: Inks Subscription Pacts with Four Investors --------------------------------------------------------------- Calypte Biomedical Corporation has entered into Subscription Agreements with four accredited investors who purchased $5.2 million of Calypte's common stock in a private placement transaction. Under the terms of the Subscription Agreements, the company issued 100 million shares of its common stock at $0.052 per share and 150 million warrants exercisable over the next 18 months. The investors are from Geneva, Switzerland and Dubai, United Arab Emirates. The proceeds of the transaction will be used primarily for general working capital purposes and related investments. Mr. David Khidasheli, chairman and chief technology architect of Informap Production LLC, leads the investor group. In conjunction with the closing of this PIPE, Calypte extended the maturity of its 8% Secured Convertible Notes and its 7% Promissory Notes issued under the 2005 Credit Facility with Marr Technologies BV, aggregating $9.2 million, from April 3, 2007 to April 3, 2009. "The company is delighted to welcome such a strong and established group of strategic investors," Roger Gale, Calypte's chairman and chief executive officer commented. "The group was introduced to the company by Marr, the company's largest stockholder. Following this financing, Marr owns over 19% of the company's outstanding common stock. Mr. Khidasheli and his co-investors have built an extensive network of important contacts in many of the company's target markets, including India, Russia, Thailand, French-speaking Africa, the Middle East and China. The company believes these contacts and resources will complement the company's own. The company expects to leverage these relationships with the financial support provided by this arrangement. In addition to this initial $5 million investment; the financing also includes an intermediate package of warrants that can be a source of up to $13.5 million in additional funding over the next 18 months. The company believes it is poised to take advantage of market opportunities, fulfilling important humanitarian needs starting with its non-invasive diagnostic test that serves as a first step in the fight against HIV/AIDS." "The company believes that the restructuring of its balance sheet, both the debt and the equity, totally changes the capabilities of the company," Mr. Gale went on to say. "With the company's oral fluid test validated in the scientific community and its intellectual property position in place to both expand its product offerings beyond HIV/AIDS and enter the U.S., the company believes that this heralds a major leap forward and breakthrough in its ability to realize the potential within Calypte." "I am more confident than ever before of the world's demand for Calypte's current products and its future products," Marat Safin, president of the Marr group said. "In my opinion, the company's research and development plans will position it as the front runner and pioneer of technological innovation, using its new test platform across a wide range of other applications." "I have known David Khidasheli for many years and I am confident in his ability to launch products, develop markets and raise awareness," Mr. Safin continued. "David has the dedication and qualities necessary to achieve goals that will, in my opinion add value to the company and help the company build the business. On behalf of Calypte's stockholders we welcome the new strategic investors in the fight against HIV and AIDS." "I have watched Calypte over the past several years after Marr's investment in the company in 2003," Mr. Khidasheli commented. "The company's humanitarian focus interested me from the beginning. With the company's Aware(TM) HIV-1/2 rapid oral fluid (OMT) tests beginning to sell, we believe it is the right time to bring our combined networks' resources to this business. I envision a combination of government and private sector-led programs involving sales while also taking advantage of local manufacturing and R&D opportunities. I expect to be able to support Calypte's increased visibility and presence in those countries in which I have worked for many years." "The company and I have discussed a short-and medium-term plan including a worldwide focus utilizing the combined contacts and resources of our organizations wherever possible," Mr. Khidasheli continued. "Asia is at the top of this list and is at an ideal stage for our involvement." About Informap Informap -- http://www.informap.com/-- employs over 800 people worldwide, with offices in Geneva, Dubai, New Delhi, Moscow, Paris, London, New York, Singapore and Beijing. About Calypte Biomedical Headquartered in Lake Oswego, Oregon, Calypte Biomedical Corporation (OTC Bulletin Board: CBMC) -- http://www.calypte.com/ -- manufactures testing solutions for HIV, STDs, and other chronic diseases. Going Concern Doubt As reported in the Troubled Company Reporter on May 1, 2006, Odenberg, Ullakko, Muranishi & Co. LLP, expressed substantial doubt about Calypte Biomedical Corporation's ability to continue as a going concern after it audited the company's financial statement for the year ended Dec. 31, 2005. The auditing firm points to the company's recurring losses from operations and negative cash flows. CELSIA TECHNOLOGIES: Low Revenues, Deficit Cue Going Concern Doubt ------------------------------------------------------------------ PKF, in New York, raised substantial doubt about Celsia Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that at Dec. 31, 2006, the company and its subsidiaries have commenced limited revenues producing operations and have an accumulated deficit of $23.7 million. The company generated revenues of $104,085 and $19,132 for the years ended Dec. 31, 2006, and 2005, respectively. It had net losses of $6.8 million and $7.2 million for the years ended Dec. 31, 2006, and 2005, respectively. As of Dec. 31, 2006, the company listed total assets of $2 million, total liabilities of $2.3 million, and accrual for employee retirement benefits of $147,112, resulting to total stockholders' deficit of $240,448. The company's balance sheet as of Dec. 31, 2006, also showed strained liquidity with total current assets of $554,284 available to pay in total current liabilities of $2.1 million. Liquidity and Capital Resources The company's main sources of liquidity during 2006 were the about $10 million in net cash proceeds generated from its 2005 Series A Preferred Stock offering as well as the $2.8 million in net proceeds from its Series B offering in 2005. The cash outflow for 2006 has been slightly below $500,000 per month, which was consistent with the company's plans and included a pay off of a short-term loan in May 2006 of $231,683. The company anticipates using its cash mainly to continue commercialization efforts and to expand the distribution network for its technology solutions. The total cash need for the next twelve months is estimated to be about $5 million, starting at Jan. 1, 2007. The main portion of the cash need is for operating expenses, cost of sales, and a smaller portion is for investments in manufacturing and R&D. The company expects to fund these activities through cash generated from operations, and through financing that the company is currently contemplating. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1c9f About Celsia Technologies Headquartered in Miami, Fla., Celsia Technologies Inc. (OTC BB: CSAT) -- http://www.celsiatechnologies.com/-- designs, develops, researches, manufactures, sells, and markets heat management products or next generation cooling solutions for the PC, flat panel display, and LED-lighting industries. The company's subsidiaries consist of Celsia Technologies UK Limited, a U.K. company formerly known as iCurie Lab Holdings Limited, and Celsia Technologies Korea Inc., a Korean company formerly known as iCurie Lab Inc. CENTRAL VERMONT: Earns $18.4 Million in Year Ended December 31 -------------------------------------------------------------- Central Vermont Public Service Corp. reported earnings of $18.4 million on operating revenues of $325.7 million for the year ended Dec. 31, 2006. This compares with earnings of $6.3 million on operating revenues of $311.4 million in 2005, which included a $21.8 million pre-tax charge to earnings related to the 2005 Rate Order. Operating revenues increased $14.3 million resulting from the sale of excess power into the wholesale energy market, partially offset by lower retail sales revenue due to milder weather compared to 2005 and a 2.75 percent rate reduction that began in April 2005. The excess power resulted primarily from Central Vermont's share of increased Vermont Yankee plant output including uprate power, increased deliveries under the long-term contract with Hydro- Quebec and increased output from independent power producers and Central Vermont's own hydro facilities. Additionally, 2005 operating revenues included a first-quarter $6.2 million 2005 Rate Order-required customer refund. For the fourth quarter of 2006, Central Vermont reported consolidated earnings of $6.3 million. This compares to fourth quarter 2005 earnings of $6.2 million. Earnings from continuing operations were $18.1 million in 2006 and $6 million in the fourth quarter. This compares to earnings from continuing operations of $1.4 million in 2005 and $802,000 in the fourth quarter. Earnings from discontinued operations are related to Catamount Energy Corporation which was sold in December 2005. "We continue to make steady progress toward restoring the company's financial strength, supported by the Vermont Public Service Board's approval of our 4.07 percent rate increase, which became effective Jan. 1, 2007," said Central Vermont president and chief executive officer Bob Young. "We believe that our long-term strategy to increase capital investments will result in improved service and reliability for customers and will drive earnings growth for our shareholders," he said. 2005 Rate Order The 2005 Rate Order resulted in a $21.8 million pre-tax charge to utility earnings in the first quarter of 2005. The primary components of the charge included a revised calculation of overearnings for the period 2001 - 2003, application of the gain resulting from the termination of the power contract with Connecticut Valley Electric Company Inc. to reduce costs, a customer refund for the period April 7, 2004, through March 31, 2005, and amortization of costs and other adjustments. Discontinued Operations - 2006 versus 2005 Earnings from discontinued operations were $251,000 in 2006. . This compares to earnings from discontinued operations of $4.9 million in 2005. Earnings from discontinued operations in 2005 included a $5.6 million after-tax gain on the Catamount Energy Corp. sale. At Dec. 31, 2006, the company's balance sheet showed $500.9 million in total assets, $188 million in total liabilities, and $312.9 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1cc2 About Central Vermont Founded in 1929, Central Vermont Public Service Corp. (NYSE: CV) -- http://www.cvps.com/-- is Vermont's largest electric utility, serving more than 155,000 customers statewide. Central Vermont's non-regulated subsidiary, Catamount Resources Corporation, sells and rents electric water heaters through a subsidiary, SmartEnergy Water Heating Services. * * * As reported in the Troubled Company reporter on Aug. 4, 2006, Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating on Central Vermont Public Service Corp. CKE RESTAURANTS: Earns $50.2 Million in Fiscal Year Ended Jan. 31 ----------------------------------------------------------------- CKE Restaurants Inc. reported net income of $50.2 million for the year ended Jan. 31, 2007, compared with net income of $181.1 million for the year ended Jan. 31, 2006. This year's results include income tax expense of $31.9 million while the prior year's results include a $123.9 million income tax benefit primarily related to a reduction of the company's previously recorded deferred tax asset valuation allowance. Income before income taxes grew to $82.1 million, a $24.8 million, or 43.4 percent, increase over the prior year's total of $57.3 million. This year's results also included $8.4 million in share-based compensation expense, which is an $8.2 million increase over the prior year amount, and $6.4 million of conversion inducement expense for which there was no comparable charge in the prior year. The prior year's results include an $11 million charge to purchase and cancel the options of the company former chairman. Absent these items, fiscal 2007 income before income taxes would have been $96.8 million in fiscal 2007 compared to $68.4 million in fiscal 2006, a $28.4 million, or 41.5 percent, improvement. In addition, fiscal 2007's results include an $8.6 million increase in workers' compensation and general liability claims expense for Carl's Jr.(R) and Hardee's(R) as a result of favorable claims expense adjustments in the prior year. Consolidated revenue for fiscal 2007 increased $70.1 million, or 4.6 percent, to $1,588.4 million, from consolidated revenue for fiscal 2006 of $1,518.3 million. For the fiscal year ended Jan. 31, 2007, the company generated earnings before interest, income taxes, depreciation and amortization and facility action charges (Adjusted EBITDA) of $172.8 million representing a $20.3 million or 13.3 percent increase over the prior fiscal year. Adjusted EBITDA, as presented, includes share-based compensation expense as a reduction to Adjusted EBITDA. Commenting on the company's performance, Andrew F. Puzder, president and chief executive officer, said, "I am pleased to report our fourth quarter and full year fiscal 2007 results. Both Carl's Jr. and Hardee's finished the year with strong same-store sales momentum and reduced their restaurant operating costs as a percent of company-operated revenue for the year. For the full fiscal year, income before income taxes was $82.1 million, a $24.8 million or 43.4 percent increase, compared to $57.3 million in the prior year. I am particularly pleased with our nearly $25 million increase in income before income taxes this year. We were able to achieve this increase despite an increase in share-based compensation expense of $8.2 million, an increase in Carl's Jr. and Hardee's workers' compensation and general liability claims expense of $8.6 million, and $6.4 million of conversion inducement expense that we incurred this year. "Our improved financial condition allowed us to return approximately $91 million to our shareholders through common stock repurchases and quarterly cash dividends during the year. In addition, we were subsequently able to increase our quarterly cash dividend payment by 50 percent and to renew our credit facility at a reduced borrowing rate." At Jan. 31, 2007, the company's balance sheet showed 794.4 million in total assets, $415.6 million in total liabilities, and $378.8 million in total stockholders' equity. The company's balance sheet at Jan. 31, 2007, also showed strained liquidity with $152.3 million in total current assets available to pay $185.1 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the year ended Jan. 31, 2007, are available for free at http://researcharchives.com/t/s?1cc0 About CKE Restaurants Headquartered in Carpinteria, California, CKE Restaurants Inc. (NYSE: CKR) -- http://www.ckr.com/-- operates some of the most popular U.S. regional brands in quick-service and fast-casual dining, including the Carl's Jr.(R), Hardee's(R), La Salsa Fresh Mexican Grill(R) and Green Burrito(R) restaurant brands. As of the end of its fiscal fourth quarter on Jan. 29, 2007, the company, through its subsidiaries, had a total of 3,105 franchised or company-operated restaurants in 43 states and in 13 countries, including 1,087 Carl's Jr. restaurants, 1,906 Hardee's restaurants and 96 La Salsa Fresh Mexican Grill restaurants. * * * As reported in the Troubled Company Reporter on March 29, 2007, Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Carpinteria, California-based CKE Restaurants Inc. The outlook is stable. CONSTRUCTION COMPLIANCE: Case Summary & 20 Largest Creditors ------------------------------------------------------------ Debtor: Construction Compliance, Inc. 624 28th Avenue North Saint Petersburg, FL 33704 Bankruptcy Case No.: 07-02650 Type of Business: The Debtor is a home builder. Chapter 11 Petition Date: April 3, 2007 Court: Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: Thomas C. Little, Esq. 2123 Northeast Coachman Road, Suite A Clearwater, FL 33765 Tel: (727) 443-5773 Total Assets: $9,579,458 Total Debts: $10,961,812 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Florida State Builders, Inc. $1,973,886 2538 9th Street North Saint Petersburg, FL 33704 Jodger Site Work & Trucking $920,033 5824 Bee Ridge Road, P.M.B. 162 Sarasota, FL 34233 Beckman Concrete and Masonry $800,210 9225 Strasse Boulevard Punta Gorda, FL 33948 Central Structural Concrete $413,512 4333 Brandywine Drive Sarasota, FL 34241 Miller Brothers Contractors $305,751 990 Cattlemen Road Sarasota, FL 34232 Sunbelt Electric $267,633 1882 Porter Lake Drive, Unit 104 Sarasota, FL 34240 H.D. Supply or Cow Lumber $259,705 P.O. Box 20429 Sarasota, FL 34276 R.G.S. Enterprises $247,388 Kimal Lumber Company $241,670 Sherwin Williams $205,631 Coastal Floors, Inc. $196,922 Benchmark Innovations $187,397 Elite Electrical Contractors $170,507 N.U. Way Drywall $168,133 Strillka Contracting $165,130 Smith and Sons Insulation $152,103 Tarpon Construction $148,684 Residential Drywall, Inc. $140,066 Sandlot Plumbing $133,778 Air Tech Heating and Cooling $133,699 CREDIT SUISSE: Moody's Junks Rating on $12.6 Mil. Class S Certs. ---------------------------------------------------------------- Moody's Investors Service has assigned definitive ratings to securities issued by Credit Suisse Commercial Mortgage Trust 2007-C1. The provisional ratings issued on Feb. 26, 2007, have been replaced with these definitive ratings: -- Class A-1, $40,000,000, rated Aaa -- Class A-2, $139,000,000, rated Aaa -- Class A-AB, $98,301,000, rated Aaa -- Class A-3, $758,000,000, rated Aaa -- Class A-1-A, $1,324,733,000, rated Aaa -- Class A-M, $212,148,000, rated Aaa -- Class A-J, $286,576,000, rated Aaa -- Class A-SP, $3,158,284,000*, rated Aaa -- Class A-X, $3,371,478,040*, rated Aaa -- Class B, $25,286,000, rated Aa1 -- Class C, $37,929,000, rated Aa2 -- Class D, $33,715,000, rated Aa3 -- Class E, $21,071,000, rated A1 -- Class F, $29,501,000, rated A2 -- Class G, $33,715,000, rated A3 -- Class H, $37,929,000, rated Baa1 -- Class J, $33,714,000, rated Baa2 -- Class K, $37,930,000, rated Baa3 -- Class L, $8,428,000, rated Ba1 -- Class M, $12,643,000, rated Ba2 -- Class N, $8,429,000, rated Ba3 -- Class O, $8,429,000, rated B1 -- Class P, $8,428,000, rated B2 -- Class Q, $8,429,000, rated B3 -- Class S, $12,643,000, rated Caa2 * Approximate notional amount Moody's has assigned definitive rating to this additional class of certificates: -- Class A-MFL, $125,000,000, rated Aaa CREDIT SUISSE: Moody's Rates $31.7 Million Class L Certs. At Ba1 ---------------------------------------------------------------- Moody's Investors Service has assigned definitive ratings to securities issued by Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates, Series 2007-TFL1. The provisional ratings issued on March 16, 2007, have been replaced with these definitive ratings: -- Class A-1, $720,000,000, rated Aaa -- Class A-2, $239,800,000, rated Aaa -- Class A-X-1, $1,110,663,893*, rated Aaa -- Class A-X-2, $155,623,443*, rated Aaa -- Class B, $40,200,000, rated Aa1 -- Class C, $38,000,000, rated Aa2 -- Class D, $25,700,000, rated Aa3 -- Class E, $25,300,000, rated A1 -- Class F, $28,500,000, rated A2 -- Class G, $26,500,000, rated A3 -- Class H, $27,300,000, rated Baa1 -- Class J, $26,700,000, rated Baa2 -- Class K, $36,600,000, rated Baa3 -- Class L, $31,700,000, rated Ba1 * Approximate notional amount DEAN FOODS: Moody's Cuts Corporate Family Rating to Ba3 from Ba1 ---------------------------------------------------------------- Moody's lowered the Corporate Family Rating of Dean Foods, Inc. to Ba3 from Ba1 following the payment of a $1.94 billion special dividend to shareholders, financed using a new $4.8 billion secured credit facility which was assigned a rating of Ba3. Moody's also withdrew the rating on the company's previous bank facility and lowered the ratings for Dean Foods Company and its subsidiary, Dean Holding Company, for their senior unsecured bonds to B1 from Ba2. The rating actions reflect the increased leverage following the dividend transaction. The rating outlook is stable. This rating action concludes the review for possible downgrade initiated on March 2, 2007. Ratings lowered: * Dean Foods Company -- Corporate family rating to Ba3 from Ba1; -- Probability of Default Rating to Ba3 from Ba1; -- Sr. unsecured to B1, LGD 5, 77% from Ba2, LGD 5, 85%; and -- Sr. unsecured shelf to B1, LGD 5, 77% from Ba2. * Dean Holding Company -- Senior unsecured to B1, LGD 5, 77% from Ba2, LGD 5, 85%. Ratings affirmed, and LGD ratings assigned: * Dean Foods Company -- $1.5 billion Revolving Credit Facility at Ba3, LGD 3, 46% from Ba3; -- $1.5 billion Term Loan A at Ba3, LGD 3, 46% from Ba3; and -- $1.8 billion Term Loan B at Ba3, LGD 3, 46% from Ba3. Rating affirmed: -- Speculative Grade Liquidity rating at SGL-2. Ratings withdrawn: -- $1.5 billion Revolving Credit Facility rated Baa3, LGD3, 37% on review for downgrade; and -- $1.5 billion Term Loan A rated Baa3, LGD3, 37% on review for downgrade. The rating change reflects the significant leverage that Dean Foods took on to fund the $1.94 billion return to shareholders. Moody's views the dividend as a shift to a more aggressive financial policy, while at the same time recognizing the company's ability to de-lever back to current levels in approximately a three-year time frame. Moody's noted that any increase in acquisition activity could slow the pace of recovery. Leverage approaching 6 times immediately after the dividend is paid is considered high for a Ba- rated company. Credit metrics at the end of 2007 are expected to fall in the single-B and in the Caa range and will remain predominately in the single-B range even by the end of 2008, according to Moody's Packaged Goods Methodology ratings grid. These weak ratios are partially offset by a number of stronger qualitative factors. Dean Foods' ratings are based on: * its national market share and scale in the US dairy industry which gives it a favorable cost position, * relatively stable earnings and cash flow, * diverse customer base supported by a large direct store delivery system and * good liquidity. Dean's rating incorporates a business franchise that falls into the Baa rating category on many measures, offset by the weaker credit metrics, including high leverage and low margins, and the company's historical track record of acquisition activity, share repurchases and comfort with relatively high leverage as evidenced by this new special dividend. Additionally, corporate governance constrains Dean's rating level given the board's approval of aggressive shareholder return policies and Moody's concern regarding the heavy presence of insider directors. Moody's notes the potential for additional cost savings and efficiency improvements as the company enters the next stage of its evolution in streamlining operations to take advantage of its scale. The affirmation of the SGL-2 reflects the company's good liquidity profile resulting from its relatively predictable cash flows and large committed credit facilities, as well as the fact that the funding of the special dividend occurred after the closing of the new $4.8 billion bank facility. The stable outlook is based on the expectation that Dean Food's operating performance will be in line with recent years, that the company will curtail share repurchases following the dividend payout and that acquisitions would be limited in number and size. Dean Foods Corporation, based in Dallas, Texas is a leading processor, producer and distributor of dairy and dairy-related products in the United States. DIGITAL RECORDERS: Losses and Deficit Cue Going Concern Doubt ------------------------------------------------------------- PricewaterhouseCoopers LLP raised substantial doubt about Digital Recorders Inc.'s ability to continue as a going concern after auditing the company's financial report at Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and accumulated deficit. The company recorded a net loss of $3.9 million on net sales of $51.3 million for the year ended Dec. 31, 2006, as compared with a net loss of $5.9 million on net sales of $45.3 million for the year ended Dec. 31, 2005. As of Dec. 31, 2006, the company's balance sheet showed total assets of $37.4 million, total liabilities of $19.9 million, and minority interests of $234,000, resulting to total stockholders' equity of $17.2 million. Cash Flows The company's net working capital as of Dec. 31, 2006, was $2.5 million, as compared with $4 million as of Dec. 31, 2005. Its principal sources of liquidity from current assets included cash and cash equivalents of $611,000, trade and other receivables of $10.5 million and inventories of $9.3 million. Its operating activities used cash of $3.2 million for the year ended Dec. 31, 2006. Its investing activities used cash of $458,000 for the year ended Dec. 31, 2006. Its financing activities generated net cash of $3.4 million. At Feb. 28, 2007, the company had cash and cash equivalents of $712,000 and a working capital surplus of $1.8 million. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1cba About Digital Recorders Through its business units and wholly owned subsidiaries, Digital Recorders Inc. (NasdaqCM: TBUS) -- http://www.digrec.com/-- designs, manufactures, sells, and services information technology and surveillance technology products either directly or through contractors. The company currently operates within two major business segments, the Transportation Communications Segment and the Law Enforcement and Surveillance Segment. DIRECTV HOLDINGS: S&P Lifts Rating on $2 Bil. Facilities to BB+ --------------------------------------------------------------- Standard & Poor's Ratings Services raised the bank loan rating on $2 billion of credit facilities at DIRECTV Holdings LLC to 'BB+' from 'BB' and revised the recovery rating to '1' from '3'. S&P also affirmed the 'BB' corporate credit and 'BB-' senior unsecured debt rating on El Segundo, California-based parent company The DIRECTV Group Inc. The outlook is stable. "The change in the bank loan and recovery ratings resulted from our reassessment of the value available to bank lenders in a default scenario," said Standard & Poor's credit analyst Naveen Sarma. The analysis included not only the minimum EBITDA to cover interest expense at time of default but also other fixed charges, including maintenance capital expenditure. The 'BB+' bank loan rating on DIRECTV Holdings is one notch above the corporate credit rating on DIRECTV. The revised recovery rating of '1' indicates our expectation of full recovery of principal in the event of a payment default. The ratings on DIRECTV, a satellite direct-to-home TV provider, are constrained by the lack of a clearly articulated financial policy. Concerns that the company may choose to markedly increase leverage weigh on the rating despite very modest leverage and a good market niche. While leverage is conservative at 1.1x debt to latest-12-month EBITDA, company officials have publicly stated that the company could significantly increase leverage, although management has not indicated any concrete plans to do so. The ratings also reflect the intensely competitive U.S. pay-TV industry and concerns about the company's longer-term competitive position due to its lack of a competitive triple play package consisting of high-speed data, voice, and advanced two-way video services that is available from cable TV companies and, to a lesser extent, the local telephone companies. Tempering factors include healthy subscriber growth, scale advantages from the company's position as the second-largest multichannel TV provider, modest leverage, significant cash, and growing discretionary cash flow. DOV PHARMA: PricewaterhouseCoopers Raises Going Concern Doubt ------------------------------------------------------------- PricewaterhouseCoopers LLP in Florham Park, N.J., expressed substantial doubt about DOV Pharmaceutical Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. DOV Pharmaceutical Inc. reported net income of $20 million on revenue of $22.2 million for the fourth quarter of 2006, compared with a net loss of $16.9 million on revenue of $1.4 million for the comparable period last year. For the year ended Dec. 31, 2006, the company reported a net loss of $38.4 million on revenue of $25.9 million, compared with a net loss of $53 million on revenue of $8.6 million for the comparable period last year. At Dec. 31, 2006, cash and cash equivalents and marketable securities totaled $42.3 million compared to $97.6 million at Dec. 31, 2005. Revenue in the fourth quarter of 2006 and for the year ended Dec. 31, 2006, increased $20.8 million and $17.3 million, respectively, from the comparable periods last year. In 2006 and 2005, DOV's revenue was comprised primarily of amortization of the $35 million fee it received on the signing of the license, research and development agreement with Merck, entered into in August 2004 and amended in August 2005. As this license was terminated in December 2006, all remaining deferred revenue was recognized in the fourth quarter of 2006. In addition, in 2005, the company recorded $2 million in revenue for the achievement of a milestone under its existing license agreement with Neurocrine Biosciences Inc. Operating Expenses include research and development expense and general and administrative expense. Operating expenses in the fourth quarter of 2006 decreased $10.8 million and increased $248,000 for the year ended Dec. 31, 2006, from the comparable periods last year. Research and development expense in the fourth quarter of 2006 and for the year ended Dec. 31, 2006, decreased $11.2 million and $11.2 million, respectively, from the comparable periods last year. For the full year 2006, the decrease in research and development expense is primarily associated with decreased external development costs of $14.8 million for DOV's product candidates and office and office-related expenses of $476,000, offset by an increase in payroll and payroll-related expenses of $3.5 million, rent expense of $409,000 and professional fees of $154,000. General and administrative expense for the fourth quarter of 2006 increased $490,000 and for the year ended Dec. 31, 2006, increased $11.4 million, from the comparable periods last year. The increase for the full year 2006 is primarily related to an increase of $7.5 million in payroll and payroll related expenses, $2 million in rent related to the Somerset facility, $827,000 in office and related expenses, $261,000 for professional fees, $172,000 in market research expenses and $800,000 in broker fees and expenses in relation to the sale of the company's state operating losses, offset by a decrease in travel and entertainment expenses of $179,000. Interest Expense of $4 million for the year ended Dec. 31, 2006, includes non-cash amortization of $2.1 million of deferred issuance costs as well as contractual interest expense of 2.5% on the company's convertible subordinated debentures. Net debt conversion and other expense of $5.6 million for the year ended Dec. 31, 2006, includes a $5.7 million non-cash charge related to the additional shares issued to induce the exchange of an aggregate of $10 million in original principal amount of the company's outstanding convertible debentures for 3,445,000 shares of its common stock in the third quarter of 2006. Income Tax Benefit of $5.7 million and $273,000 for the years ended Dec. 31, 2006, and 2005, respectively, relates to proceeds from the sale of most of the company's previous years' state net operating losses as part of the New Jersey Economic Development Authority technology business tax certificate program. At Dec. 31, 2006, the company's balance sheet showed $50.4 million in total assets and $80 million in total liabilities, resulting in a $29.6 million total stockholders' deficit. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1cc5 About DOV Pharmaceutical Based in Somerset, N.J., DOV Pharmaceutical Inc. (Other OTC: DOVP.PK) -- http://www.dovpharm.com/-- is a biopharmaceutical company focused on the discovery, acquisition and development of novel drug candidates for central nervous system disorders. The company's product candidates address some of the largest pharmaceutical markets in the world including depression, pain and insomnia. EDDIE BAUER: BDO Siedman Expresses Going Concern Doubt ------------------------------------------------------ BDO Seidman LLP raised substantial doubt about Eddie Bauer Holdings Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's ability to refinance its term loan to avoid an event of default related to the failure of the company in meeting its financial covenants in one or more future interim periods. The successor company had a net loss of $211.4 million on total revenues of $1 billion for the year ended Dec. 31, 2006. For the six month-period ended Dec. 31, 2005, the successor company had a net loss of $22.8 million on total revenues of $593.7 million. The predecessor company had a net income of $60.9 million on total revenues of $465.7 million for the six month-period ended July 2, 2005. The company listed total assets of $855.9 million and total liabilities of $509.3 million, resulting to total stockholders' equity of $346.6 million as of Dec. 31, 2006. Cash Flow Net cash provided by operating activities for fiscal 2006 totaled $50.4 million, as compared with $37.8 million for fiscal 2005 and $94.2 million for fiscal 2004. Net cash used in investing activities for fiscal 2006 totaled $45.5 million, as compared with $39.2 million for fiscal 2005. Net cash provided by investing activities for fiscal 2004 totaled $40.7 million. The company's net cash used in investing activities for fiscal 2006 primarily included $45.8 million of capital expenditures related to new store openings and store remodels and capital expenditures related to its IT systems and corporate facilities. Net cash used in financing activities for fiscal 2006 totaled $26.1 million. Net cash provided by financing activities for fiscal 2005 totaled $68.3 million and included $65.7 million of a net decrease in the receivable due from Spiegel during the six months ended July 2, 2005 and a net increase in its bank overdrafts totaling $4.2 million. Sources of Liquidity As of Dec. 30, 2006, the company had cash balances of $53.2 million. The company's primary source of cash is the cash generated from its operations and borrowings under its revolving credit facility. However, its ability to fund capital requirements will be greatly reduced if it is no longer in compliance with the covenants under its term loan and cannot amend or obtain waivers to any covenants the company violates or refinances the term loan with a new agreement containing less restrictive covenants. In addition, if sales and operating cash flow do not improve from the disappointing levels the company experienced during the second half of 2005 and the first three quarters of 2006, it may not have sufficient capital resources to fund its operating plan. Cash Requirements The company anticipates that its capital expenditures for 2007 will be about $62 million, of which about 64% relates to opening and remodeling of stores in accordance with its plans to realign its stores. Landlords will fund about $20 million of the capital expenditures, resulting in net capital expenditures of about $42 million. Predecessor and Successor Entities On March 17, 2003, Spiegel and the other Debtors, including Eddie Bauer Inc., the company's principal operating subsidiary, filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court of the Southern District of New York. The bankruptcy court confirmed the Plan of Reorganization on May 25, 2005, it became effective on June 21, 2005, and on that date the Debtors emerged from bankruptcy. The company refers to entities prior to emergence from bankruptcy as the "Predecessor" and to the emerged entities as the "Successor." A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1cb9 About Eddie Bauer Holdings Headquartered in Redmond, Washington, Eddie Bauer Holdings Inc. (NASDAQ: EBHI) -- http://www.eddiebauer.com/-- sells casual sportswear and accessories for the "modern outdoor lifestyle." Established in 1920 in Seattle, Eddie Bauer products are available at around 394 stores throughout the U.S. and Canada, through catalog sales and online at http://www.eddiebaueroutlet.com/ The company also participates in joint venture partnerships in Japan and Germany and has licensing agreements across a variety of product categories. Eddie Bauer employs about 10,000 part-time and full-time associates in the U.S. and Canada. * * * As reported in the Troubled Company Reporter on March 26, 2007, Standard & Poor's Rating Services lowered the ratings on Eddie Bauer Holdings Inc. to 'B-' from 'B'. At the same time, Standard & Poor's removed the rating from CreditWatch with negative implications, where it was placed on Nov. 13, 2006. The outlook is negative. EXCO RESOURCES: Closes $1.5 Billion Vernon & Ansley Acquisition --------------------------------------------------------------- EXCO Resources, Inc. has closed the acquisition of oil and natural gas properties, acreage and other assets in the Vernon and Ansley fields in North Louisiana from Anadarko Petroleum Corporation and Anadarko Gathering Company for $1.5 billion in cash, after contractual adjustments and subject to certain post-closing adjustments. These properties were acquired by subsidiaries of EXCO Partners, LP. Concurrent with this acquisition, EXCO also closed a private placement of $2 billion of its Preferred Stock, consisting of $390 million of 7%, cumulative convertible perpetual preferred stock, convertible into EXCO common stock at $19 per share and $1.61 billion of hybrid preferred stock bearing an initial dividend rate of 11% and initially not convertible into EXCO common stock. In accordance with New York Stock Exchange requirements for shareholder approval of certain stock issuances, EXCO intends to call a meeting of its shareholders to approve the hybrid preferred stock having terms identical to the 7% convertible preferred. The $2 billion in cash proceeds from the preferred stock issuance were used to make a $1.67 billion contribution to EXCO Partners to close the Vernon/Ansley property acquisition, to repay $262.5 million of indebtedness at EXCO Partners, and when combined with surplus cash to reduce EXCO's outstanding revolver by $352 million and to pay offering expenses. As part of these transactions, EXCO Partners' wholly-owned subsidiary, EXCO Partners Operating Partnership, LP, also entered into an amended and restated credit agreement with its banking group led by JPMorgan Chase Bank. The EPOP Credit Agreement provides for an initial revolving borrowing base of $1.3 billion, of which $1.1 billion was drawn at closing. The initial interest rate is LIBOR plus 150 bps with a maximum rate of LIBOR plus 175 bps. The contribution by EXCO to EXCO Partners plus the $1.1 billion of initial borrowing under the EPOP credit agreement were used to close the Vernon/Ansley acquisition, to repay EPOP's borrowings of $673.5 million under its existing revolver and $650 million under its second lien Senior Term Notes, plus a prepayment premium of $13 million, and to pay certain transaction expenses. EXCO intends to amend and restate its existing credit agreement to finance its pending acquisition from Anadarko of oil and natural gas properties and related assets in multiple fields located in the Mid- Continent, South Texas and Gulf Coast areas of Oklahoma and Texas and has agreed in principal with its banking group led by JPMorgan to the terms thereof. Subject to the satisfaction of various closing conditions, EXCO expects the acquisition and refinancing to close on or about May 2, 2007. In connection with the private placement, EXCO disclosed that Vincent Cebula of Oaktree Capital Management, LLC and Jeffrey Serota of Ares Management LLC have become directors of EXCO. Oaktree and Ares are significant investors in EXCO's common stock and the new preferred stock. "The company is pleased with the preferred stock offering completed and look forward to obtaining shareholders' approval of the restatement of 11% preferred into the 7% convertible preferred," Douglas H. Miller, EXCO's Chairman, stated. "All of the senior management and I intend to vote our shares for the approval and are committed to obtaining the approval. Also, we are pleased to welcome Vince Cebula and Jeff Serota to the board. We have known and worked with Vince and Jeff for many years and look forward to their insight and value they will add to the company's organization." About EXCO Resources Headquartered in Dallas, Texas, EXCO Resources, Inc. (NYSE: XCO) -- http://www.excoresources.com/-- is an oil and natural gas acquisition, exploitation, development and production company, with principal operations in Texas, Louisiana, Ohio, Oklahoma, Pennsylvania and West Virginia. * * * Moody's Investors Service's assigned 'B2' on EXCO Resources, Inc.'s long-tern corporate family rating and probability of default rating. Standard and Poor's assigned a 'B' rating on its long-term foreign and local issuer credit rating. FAIRPOINT COMM: 2006 Fourth Quarter Earnings Lowers to $3.8 Mil. ----------------------------------------------------------------- FairPoint Communications, Inc. reported its financial results for the fourth quarter ended Dec. 31, 2006. Net income decreased $3.8 million compared to the fourth quarter of 2005. This decrease was driven by an increase in expenses and a decrease in interstate access revenue. Earnings per share on a fully diluted basis were $0.12 for the three months ended Dec. 31, 2006, compared to earnings per share on a fully diluted basis of $0.23 for the same period in 2005. The company's credit facility contains a covenant that limits its ability to pay cash dividends on its common stock to the amount of Cumulative Cash Available for Dividends that accumulates from April 1, 2005 through the end of the company's most recent fiscal quarter for which financial statements are available and a compliance certificate has been delivered. Under this covenant, as of Dec. 31, 2006, the company had Cumulative Cash Available for Dividends of $41 million, from which it paid a dividend on Jan. 18, 2007 of $13.9 million, resulting in a carryover of $27.1 million of Cumulative Cash Available for Dividends. In addition to this $27.1 million carryover, based on the company's financial performance through Dec. 31, 2006, the company generated an additional $18.2 million of Cash Available for Dividends and as a result expects to have $45.2 million of Cumulative Cash Available for Dividends from which to declare and pay its next dividend. Cash Available for Dividends corresponds to the term Available Cash in the company's credit facility and Cumulative Cash Available for Dividends corresponds to the term cumulative distributable cash in the Company's credit facility. On Jan. 16, 2007, the company signed a definitive agreements with Verizon Communications Inc. that will result in Verizon establishing a separate entity for its local exchange and related business assets in Maine, New Hampshire and Vermont, spinning off the capital stock of that new entity to Verizon's stockholders, and merging it with and into FairPoint. The merger is expected to close within the next 12 months. At Dec. 31, 2006, the company's balance sheet showed total assets of $885.2 million, total liabilities of $660.5 million and total stockholders' equity of $224.7 million. About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- provides communications services to rural communities across the country. FairPoint acquires and operates telecommunications companies for the delivery of service to rural communities. The company owns and operates 31 local exchange companies located in 18 states offering an array of services, including local and long distance voice, data, Internet and broadband offerings. * * * FairPoint Communications Inc.'s long-term corporate family and probability of default carry Moody's Investors Service's 'B1' rating. The outlook is stable. Standard and Poor's assigned 'BB-' on its long-term foreign and local issuer credit rating. FIRST HORIZON: Fitch Puts Low-B Ratings on Class B-4 & B-5 Certs. ----------------------------------------------------------------- Fitch rates First Horizon Alternative Mortgage Securities Trust mortgage pass-through certificates, series 2007-FA2: -- $311.86 million classes I-A-1 through I-A-12, I-A-PO, I-A-R, II-A-1, and II-A-PO certificates (senior certificates) 'AAA'; -- $8.75 million class B-1 'AA'; -- $3.30 million class B-2 'A'; -- $2.31 million class B-3 'BBB'; -- $1.49 million privately offered class B-4 'BB'; and -- $1.16 million privately offered class B-5 'B'. The 'AAA' rating on the senior certificates reflects the 5.50% subordination provided by the 2.65% class B-1, 1.00% class B-2, 0.70% class B-3, 0.45% privately offered class B-4, 0.35% privately offered class B-5, and 0.35% privately offered class B-6. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud, and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and the servicing capabilities of First Horizon Home Loan Corporation, currently rated 'RPS2' by Fitch Ratings. Substantially all of the mortgage loans were underwritten to First Horizon's 'Super Expanded Underwriting Guidelines'. These guidelines are less stringent than First Horizon's general underwriting guidelines and could include limited documentation, higher loan-to-value ratios and lower FICO scores. Mortgage loans underwritten to the Super Expanded Underwriting Guidelines could experience higher rates of default and losses than loans underwritten using First Horizon's general underwriting guidelines. The certificates represent ownership interests in a trust fund that consists of three cross-collateralized pools of mortgages. The senior certificates whose class designation begins with I and II correspond to pools I and II, respectively. Each of the senior certificates generally receives distributions based on principal and interest collected from mortgage loans in its corresponding mortgage pool. If on any distribution date a pool is under-collateralized and borrower payments from the underlying loans are insufficient to pay senior certificate principal and interest, borrower payments from the other pools that would have been distributed to the subordinate certificates will instead be distributed as principal and interest to the under-collateralized group's senior certificates. The subordinate certificates will only receive principal or interest distributions after all the senior certificates receive all their required principal and interest distributions. As of the March 1, 2007, cut-off date, the aggregate pool consists of conventional, fully amortizing, fixed-rate mortgage loans secured by first liens on single-family residential properties, substantially all of which have original terms to maturity of 30 years. Approximately 44.65% of the mortgage loans in the aggregate pool have interest-only payments scheduled for a period of 10 years following the origination date of the mortgage loan. Thereafter, monthly payments will be increased to include principal and interest payments to sufficiently amortize the loan over the remaining term. The aggregate principal balance of the pool is $330,008,514 and the average principal balance is approximately $259,237. The mortgage pool has a weighted average original loan-to-value ratio (OLTV) of 71.21% and the weighted average FICO is 719. Rate/Term and cash-out refinance loans account for 15.37% and 37.80% of the pool, respectively. Second homes represent 5.91% of the pool, and investor occupancies represent 23.20% of the pool. The states with the largest concentrations are California (19.08%), Washington (6.42%), Utah (6.41%), Arizona (6.57%), and Maryland (5.87%). All other states represent less than 5% of the aggregate pool as of the cut-off date. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. The trust, First Horizon Alternative Mortgage Securities Trust 2007-FA2, was created for the sole purpose of issuing the certificates. FIRST HORIZON: Fitch Puts Low-B Ratings on 2 Certificate Classes ---------------------------------------------------------------- Fitch rates First Horizon Alternative Mortgage Securities Trust mortgage pass-through certificates, series 2007-AA1: -- $329.1 million classes I-A-1 through I-A-4, I-A-R, II-A-1 and II-A-2 certificates (senior certificates) 'AAA'; -- $11.41 million class B-1 certificates 'AA'; -- $3.51 million class B-2 certificates 'A'; -- $2.63 million class B-3 certificates 'BBB'; -- $1.76 million privately offered class B-4 certificates 'BB'; -- $1.40 million privately offered class B-5 certificates 'B'. The 'AAA' rating on the senior certificates reflects the 6.25% subordination provided by the 3.25% class B-1, the 1.00% class B-2, the 0.75% class B-3, the 0.50% privately offered class B-4, the 0.40% privately offered class B-5, and the 0.35% privately offered class B-6. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and the servicing capabilities of First Horizon Home Loan Corporation, currently rated 'RPS2' by Fitch. Substantially all of the mortgage loans were underwritten to First Horizon's 'Super Expanded Underwriting Guidelines'. These guidelines are less stringent than First Horizon's general underwriting guidelines and could include limited documentation, higher loan-to-value ratios and lower FICO scores. Mortgage loans underwritten to the 'Super Expanded Underwriting Guidelines' could experience higher rates of default and losses than loans underwritten using First Horizon's general underwriting guidelines. The certificates represent ownership interests in a trust fund that consists of two cross-collateralized pools of mortgages. The senior certificates whose class designation begins with I, and II correspond to Pools I, and II, respectively. Each of the senior certificates generally receives distributions based on principal and interest collected from mortgage loans in its corresponding mortgage pool. If on any distribution date a pool is under-collateralized and borrower payments from the underlying loans are insufficient to pay senior certificate principal and interest, borrower payments from the other pools that would have been distributed to the subordinate certificates will instead be distributed as principal and interest to the under-collateralized group's senior certificates. The subordinate certificates will only receive principal or interest distributions after all the senior certificates receive all their required principal and interest distributions. As of the March 1, 2007, cut-off date, the aggregate pool consists of conventional, fully amortizing, fixed-rate mortgage loans secured by first liens on single-family residential properties, substantially all of which have original terms to maturity of 30 years. Approximately 85.08% of the mortgage loans in the aggregate pool have interest only payments scheduled for a period of five or 10 years following the origination date of the mortgage loan. Thereafter, monthly payments will be increased to include principal and interest payments to sufficiently amortize the loan over the remaining term. The principal balance of the aggregate pool is $351,048,250 and the average principal balance is approximately $304,994. The mortgage pool has a weighted average original loan-to-value ratio (OLTV) of 73.55% and the weighted average FICO is 721. Rate/Term and cash-out refinance loans account for 14.87% and 23.84% of the pool, respectively. Second homes represent 9.04% of the pool, and investor occupancies represent 27.15% of the pool. The states with the largest concentrations are California (23.85%), Arizona (10.55%), and Nevada (7.74%). All other states represent less than 5% of the pool as of the cut-off date. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. The trust, First Horizon Alternative Mortgage Securities Trust 2007-AA1, was created for the sole purpose of issuing the certificates. FIRST HORIZON: Fitch Puts Low-B Ratings on Class B-4 & B-5 Certs. ----------------------------------------------------------------- Fitch rates First Horizon Asset Securities Inc.'s mortgage pass- through certificates, series 2007-2: -- $202.7 million classes I-A-1 through I-A-7, I-A-PO, I-A-R and II-A-1 senior certificates 'AAA'; -- $4.62 million class B-1 'AA'; -- $1.05 million class B-2 'A'; -- $630,000 class B-3 'BBB'; -- $420,000 class B-4 'BB'; and -- $315,000 class B-5 'B'. The class B-6 certificate is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 3.50% subordination provided by the 2.20% class B-1, 0.50% class B-2, 0.30% class B-3, 0.20% privately offered class B-4, 0.15% privately offered class B-5 and 0.15% privately offered class B-6 certificates. The ratings on the class B-1, B-2, B-3, B-4, and B-5 certificates are based on their respective subordination. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud, and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and the servicing capabilities of First Horizon Home Loan Corporation. The certificates represent ownership interests in a trust fund that consists of three cross-collateralized pools of mortgages. The senior certificates whose class designation begins with I, and II correspond to Pools I, and II, respectively. Each of the senior certificates generally receives distributions based on principal and interest collected from mortgage loans in its corresponding mortgage pool. If on any distribution date a pool is under-collateralized and borrower payments from the underlying loans are insufficient to pay senior certificate principal and interest, borrower payments from the other pools that would have been distributed to the subordinate certificates will instead be distributed as principal and interest to the under-collateralized group's senior certificates. The subordinate certificates will only receive principal or interest distributions after all the senior certificates receive all their required principal and interest distributions. As of the March 1, 2007, cut-off date, the aggregate Pool consists of conventional, fully amortizing, fixed-rate mortgage loans secured by first liens on single-family residential properties, substantially all of which have original terms to maturity of 30 years. Approximately 33.94% of the mortgage loans in the aggregate pool have interest only payments scheduled for a period of ten years following the origination date of the mortgage loan. Thereafter, monthly payments will be increased to include principal and interest payments to sufficiently amortize the loan over the remaining term. The aggregate principal balance of the pool is $210,027,734 and the average principal balance is approximately $644,257. The mortgage pool has a weighted average original loan-to-value ratio (OLTV) of 71.08% and the weighted average FICO is 750. Rate/Term and cash-out refinance loans account for 27.29% and 26.34% of the pool, respectively. Second homes represent 8.07% of the pool, and investor occupancies represent 0.44% of the pool. The states with the largest concentrations are California (22.2%), Washington (13.37%), Virginia (7.28%), Arizona (7.04%), and Maryland (6.19%). All other states represent less than 5% of the aggregate pool as of the cut-off date. None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. All of the mortgage loans were originated or acquired in accordance with First Horizon Home Loan Corporation's underwriting guidelines. The trust, First Horizon Mortgage Pass-Through Trust 2007-2, was created for the sole purpose of issuing the certificates. FONTAINEBLEAU HOLDINGS: Moody's Places Corp. Family Rating at B2 ---------------------------------------------------------------- Moody's Investors Service assigned these ratings to Fontainebleau Las Vegas Holdings, LLC and its direct wholly owned subsidiary, Fontainebleau Las Vegas, LLC: Fontainebleau Las Vegas Holdings, LLC: -- Corporate Family rating at B2; -- Probability of Default rating at B2; and -- Loss Given Default rating at LGD 4, 50%. Fontainebleau Las Vegas LLC: -- $1,000 million 5 year secured and guaranteed revolving credit facility, B1, LGD 3, 36%; -- $850 million 7 year secured and guaranteed delayed draw term loan, B1, LGD 3, 36%; and -- Stable ratings outlook. The ratings are subject to a minimum cash contribution of $430 million from FLVH's ultimate parent, Fontainebleau Resorts, LLC (Parent), issuance of $675 million junior capital, guarantees from the Parent, FLVH, and Fontainebleau Resort Properties I, LLC (an intermediate holding company), and a completion guarantee from Turnberry Residential Limited Partner, L.P. The ratings are also subject to receipt and review of final terms and documentation. The cash contribution, together with approximately $44 million of additional cash equity spent by the Parent as of the financing date, $850 million of secured delayed draw term loan, $675 million of second mortgage notes and drawings from the $1,000 million secured revolving credit facility will be used to construct the Fontainebleau Las Vegas resort on the north end of the Las Vegas Strip. The project budget totals $2.5 billion, including the retail component that is being financed separately. The Parent is owned by entities controlled by Jeffery Soffer, management and third party investors. Mr. Soffer is a principal in Turnberry, a large successful real estate development and property management company. In order to make the required $430 million cash equity contribution to FLVH, the Parent is raising approximately $765 million through a series of transactions including a $375 million common equity raise, a $185 million PIK preferred security and $205 million of proceeds from the retail component that is being financed by an affiliated entity. The Parent will contribute this $430 million to FLVH as equity with the remaining proceeds being used to repay existing indebtedness and fund corporate overhead and pre-development expenses during the construction period of the project. Pursuant to Moody's Global Gaming Methodology the ratings are supported by the project's size, location in a low regulatory risk jurisdiction and successful development history of the principal sponsor that are offset by above average leverage, low interest coverage and construction risk. The B2 CFR rating reflects significant construction and ramp-up risk, single asset and market concentration risk, reliance on the sale of condo-hotel units to reduce debt to a manageable level post construction, and a modest cash equity base equal to 20% of the project budget, excluding the cost of the retail component and prior to any condo-hotel sales. Additional risks include, shared construction costs with the retail component, growing supply of luxury resorts on the Las Vegas Strip, the parent company's simultaneous pursuit of a development in Miami, and the project's location in an evolving area of the Las Vegas strip. Assuming condo-hotel units are sold over a 35 month period ending in the third quarter of 2010 at around $1,300 per square foot and the resort achieves its first year target return level, Moody's estimates debt/EBITDA of 6.0x and 4.7x in 2010 and 2011, respectively. These levels are reflective of a B2 rating in 2010 and a low Ba3 rating in 2011 pursuant to Moody's Global Gaming Methodology. Moody's estimates EBITDA/interest of 1.8x and 2.4x in 2010 and 2011, respectively. These levels are reflective of a B3 rating in 2010 and a B2 rating in 2011 pursuant to Moody's Global Gaming Methodology. The ratings consider the Turnberry's significant construction and development experience -- including condominium and condo-hotel projects on the Las Vegas strip, successful track record of the management team, solid liquidity, as well as the reasonability of management's projections that take into account the time necessary for a project of this scale to grow into its sustainable margin profile. Project liquidity includes; a $117 million budget contingency reserve, a $100 million completion guaranty from TR - a credit worthy affiliate of the project Sponsor - supported by a $50 million letter of credit, a funded $50 million liquidity reserve, and estimated revolver availability of about $100 million at opening. Additionally, the ratings are supported by Las Vegas' low risk regulatory designation, the city's position as a primary destination resort and its growth as one of the largest entertainment markets and most popular trade show destinations in the U.S. The rating of the bank facilities reflects the application of Moody's Loss Given Default Methodology. Key structural protections in the documentation include a requirement that no less than 95% of hard costs be committed prior to the initial advance under the bank facilities, use of equity and second mortgage note proceeds first, a requirement that the project budget remain in-balance as advances are made, and a requirement that significant scope changes, if any, be funded from realized project savings and/or new equity. Additionally, covenants from the completion guarantor to limit distributions and maintain a certain level of net worth are expected to be in place, mandatory prepayments from the sale of condo-hotel units, a tight restricted payments provision and small baskets for additional liens, debts, and investments provide adequate protection to lenders. The stable ratings outlook anticipates that the project will be up and running by the expected completion date, the condo-hotel units will be sold as projected, and the resort will generate a sufficient return to meet debt service requirements. The critical inflection points for the credit are project completion on time, on budget and the sale and closing of the condo-hotel units by year-end 2010 to reduce peak funded debt to a serviceable level. Ratings could be lowered if the project runs into material construction delays, cost overruns not covered by the budget contingency, if the condo-hotel units sell more slowly or at lower price points, or the project does not ramp up as expected. Unless the project exceeds its projected returns, upward rating momentum is not likely until a year or more after opening. Fontainebleau will feature a 3,889 room hotel of which 1,018 will be luxury condominium-hotel units, a 100,000 square foot casino, 280,000 square feet of convention and meeting space, a spa, 3,200 seat theatre, 291,000 square feet of retail space and numerous restaurants and bars. The projects is expected to completed in the third quarter of 2009. The project is located on 24.4 acres at the corner of Las Vegas and Riviera Boulevards between the Sahara and Riviera and across the street from Circus Circus. GIBRALTAR LIMITED: Moody's to Withdraw Ratings on 5 Note Classes ---------------------------------------------------------------- Moody's Investors Service has withdrawn the ratings on the notes issued by Gibraltar Limited CBO: * $272,000,000 Class A Floating Rate Notes due 2011 -- Prior Rating: Aaa -- Current Rating: WR * $17,500,000 Class B Floating Rate Notes due 2011 -- Prior Rating: A3 -- Current Rating: WR * $22,500,000 Class B Fixed Rate Notes due 2011 -- Prior Rating: A3 -- Current Rating: WR * $24,000,000 Class C Fixed Rate Notes due 2011 -- Prior Rating: Ba2 -- Current Rating: WR * $24,000,000 Class D Fixed Rate Notes due 2011 -- Prior Rating: Caa1 -- Current Rating: WR According to Moody's, the ratings were withdrawn because the notes were redeemed in full on Feb. 26, 2007. GLEN DEVELOPMENT: General Unsecured Creditors May Get Full Payment ------------------------------------------------------------------ Glen Development Group LLC delivered a disclosure statement describing its Chapter 11 Plan of Reorganization to the U.S. Bankruptcy Court for the Western District of Washington at Seattle. Treatment of Claims Under the Plan, the Class 1 Secured Claim of King County for real property taxes will be paid in full on the effective date of the Plan. Marlow on Ravenna-SEA LLC's Class 2 Secured Claim will receive payment in full on the effective date of the Plan. Additionally, attorney fees incurred by Marlow in enforcing its secured claim that the Court determines are reasonable will be paid from the net proceeds from refinancing of the Debtor's real property after payment of all normal and usual refinancing costs. The Debtor's real property, located at 9090 Ravenna Avenue in Seattle, Washington, consists of a newly constructed six-unit condominium building. The Class 3 Secured Claim of TRA Industries Inc. will be paid $24,500 from the Refinancing Proceeds. Allowed General Unsecured Claims will be paid up to the full amount of their claim from the net proceeds from the sale of the real property after payment of all sale costs, including commissions, pro-rated taxes, title and escrow fees and other ordinary sales costs. Holders of Class 5 General Unsecured Insider Claims will be paid up to the full amount of their claim soon as practicable from the Sale Proceeds depending on the amount available. Holders of Equity Security Interests in the Debtor will be entitled to any Sale Proceeds remaining after payment in full of claims in previous classes. Plan Funding The Debtor has secured a commitment for refinancing in the amount of $1.274 million from Hard Money Placement LLC, payable in one year at $11,416 per month, with a 10.25% interest rate. The commitment is based on the $1.820 million appraisal of the real property. The commitment is contingent upon the issuance of a certificate of occupancy. The Debtor also proposes to fund distribution under the Plan through sale or refinancing of its real property. Disclosure Statement Hearing The Court will convene a hearing to consider the adequacy of the Debtor's disclosure statement on April 13, 2007, at 11:00 a.m. Objections, if any, to the disclosure statement are due on April 6, 2007. Headquartered in Seattle, Washington, Glen Development Group LLC filed for Chapter 11 protection on November 22, 2006 (Bankr. W.D. Wash. Case No. 06-14178). Michael M. Feinberg, Esq. of Karr Tuttle Campbell PS represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. In its schedules, the Debtor listed total assets of $1,500,000 and total debts of $1,389,723. GRAMERCY COURT: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Gramercy Court, Ltd. 7500 Bellaire Boulevard, Suite 201 Houston, TX 77036-5021 Bankruptcy Case No.: 07-80177 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- 2600 Park Living, Ltd. 07-80178 Chapter 11 Petition Date: April 3, 2007 Court: Southern District of Texas (Galveston) Judge: Letitia Z. Clark Debtors' Counsel: Chasless L. Yancy, Esq. David A. Zdunkewicz, Esq. Andrews Kurth LLP 600 Travis Suite 4200 Houston, TX 77002 Tel: (713) 220-4200 Fax: (713) 220-4285 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million A. Gramercy Court, Ltd. does not have any creditors who are not insiders. B. 2600 Park Living, Ltd.'s 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hughes MRO Goods Provided $1,877 P.O. Box 842434 Dallas, TX 75284 TFI Services/Hire Property Goods Provided $1,155 1800 St. James Place, Suite 110 Houston, TX 77056-4109 Apartment Data Services, Inc. Advertising $1,040 1500 South Dairy Ashford Services Suite 175 Houston, TX 77077-3860 Class Cuts Inc. Services Rendered $785 Mac Mechanical Inc. $767 Wilmar Industries Goods Provided $619 Appliance Rental, Inc. Rental Fee $487 The Home Depot Supply Goods Provided $449 David Stephens $350 Apartments.com Advertising $345 AlarmTechs, Inc. Services Rendered $308 D&C Painting Office Supplies $189 Ozarka Natural Spring Water Water Delivery $129 Hagee's Bay Area Ans. Service Services Rendered $106 Affinity Carpet Cleaning, Inc. Services Rendered $65 Grace Hill, Inc. Training Subscription $43 Brilliant Promotional Products Goods Supplied $16 HERBALIFE LTD: Whitney Bid Rejection Cues S&P to Retain Watch ------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB+' corporate credit rating on Los Angeles-based Herbalife Ltd. remains on CreditWatch with negative implications following the company's announcement that the company's board of directors has rejected a bid to be acquired by Whitney V L.P. The board indicated that although it views Whitney's bid as too low, it would consider an improved offer. The company is currently carrying minimal debt leverage, but existing debt capacity would be stretched well beyond the limits of the current ratings if a predominantly debt-funded acquisition of the company were to transpire. Ratings on the company will remain on CreditWatch until greater clarity around a potential LBO emerges. HEXCEL CORP: Good Performance Cues Moody's to Upgrade Ratings ------------------------------------------------------------- Moody's Investors Service has raised the ratings of Hexcel Corporation, Corporate Family Rating to Ba3 from B1. The ratings on Hexcel's senior secured credit facility have been upgraded to Ba1 from Ba2, while the subordinated notes ratings were upgraded to B1 from B3. The ratings outlook is Stable. The ratings reflect Hexcel's strengthening credit profile, including substantial interest coverage and modest leverage, resulting from dramatically improved operating performance during the recent recovery in the commercial aircraft OEM supplier sector. The ratings are further supported by Hexcel's strong competitive position in what is expected to be a continuing robust aircraft OEM supplier environment. The expectation for sustained credit metrics at levels at or above those typical for the Ba3 rating outweighs risk associated with a concentration of revenue on two customers in the commercial aircraft OEM sector, negative free cash flow generation due to heavy current levels of expenditures on production capacity, and moderating but continued uncertainties surrounding the production and delivery schedule of a major new aircraft platform -- the Airbus A380. Moody's also expects that proceeds from the sale of certain reinforcement product lines will generally be applied to debt reduction. The stable rating outlook reflects Moody's expectations for stable near-term operating margins and modest revenue growth. The stable outlook also assumes that any near-term developments relating to the production and delivery schedule of the A380 will have no material negative impact on the company's margins, working capital requirements, nor will it materially set back Hexcel's growth projections through 2008. Ratings or their outlook could be subject to upward revision if the company were to demonstrate sustained free cash flow generation of at least 5% of debt while maintaining or improving operating margins. Reduction of leverage to less than 3.0x Debt/EBITDA due to better than expected near term operating results or debt repayment through proceeds from business divestitures could also positively affect ratings. Conversely, ratings or their outlook could be lowered if operating results were to face unexpected deterioration possibly as the result of further problems regarding the A380 or higher than expected restructuring costs such that leverage were to increase above 4.5x Debt/EBITDA and interest coverage were to fall below 2.0 times. Substantial increases in debt, including through more permanent revolving credit facility drawings, which would cause a deterioration of liquidity, could also negatively affect ratings. Upgraded: * Senior secured credit facility, to Ba1, LGD2, 22% from Ba2 * Senior subordinated notes, to B1, LGD5, 74% from B3 * Corporate Family Rating to Ba3 from B1 * Probability of Default Rating to Ba3 from B1 Hexcel Corporation, headquartered in Stamford, Connecticut, is a leading advanced structural materials company. It develops, manufactures and markets lightweight, high-performance structural materials, including carbon fibers, reinforcements, prepregs, honeycomb, matrix systems, adhesives and composite structures, used in commercial aerospace, space and defense and industrial applications. HOLYOKE HOSPITAL: Moody's Holds Ba1 Rating on $11.4 Million Bonds ----------------------------------------------------------------- Moody's Investors Service has affirmed its Ba1 rating assigned to Holyoke Medical Center's $11.4 million of Revenue Bonds, Series B issued by the Massachusetts Health & Educational Facilities Authority. The bonds are secured by a gross revenue pledge of Holyoke and no interest rate derivatives. Strengths: * Fiscal year 2006 marks the second year of significant operating improvement at Holyoke's parent, Valley Health Systems, of which Holyoke represents about 85% of system operating revenues, with operating cash flow increasing to $6.6 million (5.4% operating cash flow margin) from $5.8 million (5.0% cash flow margin) in FY 2005 and a large improvement over $2.5 million (2.4% margin) in FY 2004. * State appropriations of $3.6 million from the States Distressed Provider Expendable Trust Fund received in FY 2006, an increase over $2.1 million received in the funds' inaugural year, FY 2005; however, future receipt of these funds is uncertain and any discontinuation of such funding will be a significant credit factor. * Further strengthening of debt service coverage measures with 2.91x debt to cash flow from higher (weaker) 4.26x in FY 2005 down from very high 11.26 times in FY 2004) and improved maximum annual debt service coverage (Moody's adjusted) of 2.32 in FY 2006, from weaker 1.92 times in FY 2005 and very low 1.16 in FY 2004. * Increase in liquidity to $18.2 million (57 days cash on hand) in FY 2006 from $13.6 million (45 days cash) in FY 2005, due to the use of leases to fund capital needs, reduction in days in accounts receivable, receipt of state funds and an unrestricted gift of $1 million in FY 2006. Challenges: * Decline of 3% in inpatient admissions in FY 2006 following moderate 1% increase in FY 2005; flat outpatient surgery growth in FY 2005 and FY 2006 (and a 9% decline in 3 months of FY 2007) primarily due to the replacement of four anesthesiologists in FY 2006 and subsequent ramping up of new group. * FY 2006 operating margin approximately $2.3 million unfavorable to budget due to lower than anticipated volumes, expense related to employment of anesthesiology group and unbudgeted increase in average length of stay. * Poor demographics in the service area with poverty levels above state and national averages and per capita income at 61% of state average; 8.6% decline in population between 1990 and 2005 (though the area has seen 3% growth since 2000). * Strong competition from two larger providers located 15 minutes away in Springfield, 609-bed Baystate Medical Center (rated A1) and 375-bed Mercy Hospital (part of A1- rated Catholic Health East); Holyoke reports an estimated 31% market share in its primary service area which is behind Baystate's 32% market share but ahead of Mercy's 16% market Share. Outlook: The rating outlook is stable and reflects the improved financial performance in FY 2005 and FY 2006 which will likely be sustainable in FY 2007 given the expectation of continued receipt of state appropriations; given the uncertainty surrounding continuation of these funds, Moody's remains concerned for the longer term financial performance of the hospital. What could change the rating -- up Much improved financial performance, growth in liquidity, growth in inpatient and outpatient volumes and market share. What could change the rating -- down Departure from current results, decline in liquidity, decline in market share and volumes, material increase in leverage, possibly related to loss of state appropriations. Key indicators: * Based on financial statements for Valley Health Systems, Inc. and Affiliates * First number reflects audit year ended September 30, 2005 * Second number reflects audit year ended September 30, 2006 * Investment returns normalized at 6% unless otherwise noted * Inpatient admissions: 7,377; 7,161 (hospital only) * Total operating revenues: $114.7 million; $122.3 million * Moody's-adjusted net revenue available for debt service: $6.7 million; $8.8 million * Total debt outstanding: $22.7 million; $21.8 million * Maximum annual debt service (MADS): $3.5 million; $3.8 million * MADS coverage based on reported investment income: 1.82x; 2.32x * Moody's-adjusted MADS coverage: 1.92x; 2.32x * Debt-to-cash flow: 4.26x; 2.91x * Days cash on hand: 45 days; 57 days * Cash-to-debt: 60.0%; 83.3% * Operating margin: -0.2%; 0.1% * Operating cash flow margin: 5.0%; 5.4% * RATED DEBT -- Medical Center MHEFA Revenue Bonds, Series B, $11.4 million. INTEGRATED ALARM: Closes Merger Transaction with Protection One --------------------------------------------------------------- Protection One, Inc. and Integrated Alarm Services Group disclosed the closing of their merger, pursuant to which IASG will merge with a wholly owned subsidiary of Protection One. In addition, Protection One stock ceased trading on the OTC Bulletin Board and commenced trading on the Nasdaq(R) Global Market. With its move to Nasdaq, Protection One's trading symbol changed to PONE. On March 27, 2007, IASG shareholders voted overwhelmingly in favor of the merger, which received 99.9% of the 17.7 million shares cast. Pursuant to the merger, shareholders of IASG will receive 0.29 shares of Protection One, Inc. common stock for each share of IASG common stock owned, plus cash for any fractional shares. Approximately 7.1 million shares of Protection One common stock will be issued resulting in a total of 25.3 million shares outstanding, of which IASG and Protection One shareholders will own approximately 28% and 72%, respectively. Outlook With the completion of the merger, Protection One assumes ownership of Criticom International, which will combine with Protection One's wholesale monitoring provider, CMS, and will soon operate under a new name, Criticom Monitoring Services(TM). Protection One will continue operating under the name Protection One(R), operating under the name Network Multifamily(R). In total, the merged company, which will remain based in Lawrence, Kansas, will have 73 branches across the country, six state-of- the-art monitoring response centers, and a dedicated disaster recovery center. Management believes that larger scale operations, elimination of redundancies and greater purchasing power generated by this merger will, within 12 months, result in net savings of $11 million to $13 million on an annualized basis. On a combined basis, Protection One and IASG had revenues and adjusted EBITDA of $364.9 million and $106.0 million, respectively, for the 12-month period ended Dec. 31, 2006. As of Dec. 31, 2006, Protection One and IASG on a combined basis had recurring monthly revenue, a well known valuation metric used for monitoring services companies, of $26.9 million. "Our successful completion of this merger paves the way to create a leading security monitoring services company with a diversified portfolio of security assets," Richard Ginsburg, President and CEO of Protection One, said. "It is a logical step for both Protection One and IASG and one that we believe will create value for shareholders, enhanced services for our customers and a growing company, with many new opportunities, for our employees. I would also like to thank IASG's shareholders for supporting the merger so decisively." The companies began merging operations on April 2, 2007, with a transition period occurring before IASG residential and commercial customers will begin seeing the Protection One name as their service provider and before Protection One will begin servicing or billing customers. In addition, Criticom dealers will soon receive information about the specific benefits of this merger for them. New Board Members As part of the merger closing, current IASG Board members, Arlene M. Yocum and Raymond C. Kubacki, will join the new Protection One Board of Directors. Protection One expects to announce the appointment of a ninth member to the board shortly. About Protection One Headquartered in Lawrence, Kansas, Protection One Inc. (Nasdaq: PONE, previously OTC Bulletin Board: PONN) -- http://www.protectionone.com/-- provides installation, maintenance and monitoring of these state-of-the-art, user- friendly fire and burglar alarm systems. Network Multifamily, the company's wholly owned subsidiary, is the largest and oldest monitored security provider to the multifamily housing market. Protection One's 2,300 professionals serve its customers from more than 64 branch offices and three state-of-the-art monitoring facilities. About Integrated Alarm Headquartered in Albany, New York, Integrated Alarm Services Group Inc. (NASDAQ: IASG) -- http://www.iasg.us/-- provides total integrated solutions to independent security alarm dealers located throughout the United States to assist them in serving the residential and commercial security alarm market. IASG's services include alarm contract financing including the purchase of dealer alarm contracts for its own portfolio and providing loans to dealers collateralized by alarm contracts. IASG, with approximately 4,000 independent dealer relationships, is also the largest wholesale provider of alarm contract monitoring and servicing. INTEGRATED ALARM: Merger Prompts Moody's to Withdraw Ratings ------------------------------------------------------------ Moody's Investors Service withdrew Integrated Alarm Services Group, Inc.'s B3 Corporate Family Rating and related debt ratings following the recent consummation of its merger with Protection One Alarm Monitoring, Inc. After the completion of the merger, all debt related to IASG were redeemed. Ratings Withdrawn: * B3 Corporate Family Rating; * B3 Probability of Default Rating; * B3, LGD4, 58% rating on the $125 million second lien notes due 2011; and, * SGL-4 Speculative Grade Liquidity Rating. Headquartered in Albany, New York, Integrated Alarm Services Group Inc. provides alarm monitoring services to independent security alarm companies. For the fiscal year ended Dec. 31, 2006, the company reported approximately $94 million in revenues. JEAN COUTU: Inks Settlement Agreement with 8-1/2% Noteholders ------------------------------------------------------------- The Jean Coutu Group, Inc. has entered into a settlement agreement with holders of a majority of the outstanding principal amount of its 8-1/2% Senior Subordinated Notes due 2014 in connection with the litigation in which the company is seeking a declaratory judgment that, among other things, the sale of certain of the company's assets to Rite Aid Corporation constitutes the sale of substantially all of its properties and assets for the purposes of the Indenture. Holders of the Notes party to the settlement agreement are agreeing to tender their Notes and deliver their consents to the company's tender offer and consent solicitation which was made on the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated March 28, 2007 and the accompanying Consent and Letter of Transmittal, as amended hereby. As part of the settlement agreement the company has agreed to pay certain litigation expenses of certain other parties to the litigation. Holders of the Notes who are entering into the settlement agreement hold a majority in aggregate principal amount of the outstanding Notes and upon the tender of their Notes as agreed in the settlement agreement the Proposed Amendments will be approved. In connection with the settlement agreement the company is amending the total consideration offered to holders of the Notes in its tender offer and consent solicitation for the Notes. The company is amending the total consideration by decreasing, from 200 basis points to 150 basis points, the Spread used in calculating the total consideration pursuant to the fixed spread pricing formula, as set forth in the Offer Documents. The company is not otherwise amending the pricing formula. The company amended the Consent Expiration Date, which will was yesterday, April 4, 2007 and the Price Determination Date, which will now be 2:00 p.m. New York City time on April 6, 2007, unless extended. The offer by The Jean Coutu Group will expire at 8:00 a.m., New York City time, on April 26, 2007, unless extended. Holders of Notes who are not party to the settlement agreement and who tender their Notes prior to the revised Consent Expiration Date may validly withdraw their tendered Notes and revoke their consents at any time prior to the revised Consent Expiration Date, but not thereafter unless the tender offer and the consent solicitation is terminated without any Notes being purchased. Questions about the tender offer may be directed to Global Bondholder Services Corporation, the information agent for the tender offer and consent solicitation, at (866) 540-1500 (toll free). Copies of the Offer Documents and other related documents may be obtained from the information agent. About The Jean Coutu Group The Jean Coutu Group (PJC) Inc. is a drugstore chain in North America and in the eastern United States and Canada. The company and its combined network of 2,186 corporate and franchised drugstores employ more than 61,000 people. The Jean Coutu Group's United States operations employ 46,000 people and comprise 1,859 corporate owned stores located in 18 states of the Northeastern, mid-Atlantic and Southeastern United States. The Jean Coutu Group's Canadian operations and franchised drugstores in its network employ over 15,000 people and comprise 327 PJC Jean Coutu franchised stores in Quebec, New Brunswick and Ontario. * * * The Jean Coutu Group Inc.'s $350 million Guaranteed Senior Secured Revolver carries Moody's Investors Service's B2 rating. The company also carries Moody's B3 long-term corporate family, senior unsecured debt, and probability of default ratings; B1 bank loan debt rating; and Caa2 senior subordinated debt rating. The company also carries Standard & Poor's B+ long-term foreign and local issuer credit ratings. Also, the company bears Fitch's CCC senior subordinated debt rating, B- long-term issuer default rating; BB- bank loan credit rating; and B+ senior unsecured debt rating. JORDAN INDUSTRIES: Ernst & Young Raises Going Concern Doubt ----------------------------------------------------------- Ernst & Young LLP, in Chicago, expressed substantial doubt about Jordan Industries Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's substantial debt maturing within the next year. Jordan Industries Inc. reported net income of $163.4 million on net sales of $256.7 million for the year ended Dec. 31, 2006, compared with a net loss of $6 million on net sales of $278.9 million a year ago. 2006 results includes income related to the sale of Kinetek Inc. of $165.1 million. The decrease in sales was primarily due to reduced sales in the Jordan Specialty Plastics segment and to a lesser extent, declines in the Jordan Auto Aftermarket segment. The sales decline at Jordan Specialty Plastics was driven by reduced sales of certain hardware products to the wholesale distribution channel due to the limited availability of insulation material used in the products, offset partially by sales growth in office products and reflector products. Sales decline at Jordan Auto Aftermarket is primarily the result of a 27% decrease in the sales of torque converters to original equipment manufacturers. In addition, better warranty experience on new vehicles has also reduced demand for torque converter replacements. Operating income from continuing operations decreased $10.6 million, to a loss of $2.5 million for 2006 from income of $8.1 million for 2005. The most significant decrease in operating income was due to income related to the refinancing of an affiliate of $8 million in 2005 and income of $14.7 million in 2005 from the reversal of reserves previously recorded against the receivables from JIR Broadcast and JIR Paging which were recorded in previous years and were no longer necessary at Dec. 31, 2005, as these receivables were deemed fully collectible. At Dec. 31, 2006, the company's balance sheet showed $311.7 million in total assets and $403.3 million in total liabilities, resulting in a $91.6 million total shareholders' deficit. The company's balance sheet at Dec. 31, 2006, also showed strained liquidity with $244 million in total current assets available to pay $277.8 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1cc3 Sale of Kinetek Inc. In November 2006, the company's wholly owned subsidiary, Motors and Gears Holdings Inc. sold the operating subsidiaries of its wholly-owned subsidiary, Kinetek Inc. Kinetek, Inc. was comprised of 6 operating companies in the motors and controls industries. Kinetek Inc.'s operating subsidiaries were sold to Resolute Fund for cash proceeds of $445.4 million prior to certain fees and expenses. Debt Maturing in 2007 At Dec. 31, 2006, the company had outstanding long term debt of $307 million, of which $209.1 million is due in 2007. Currently, the company is contemplating various avenues of refinancing or repaying this debt and management is confident that it will do so prior to maturity. About Jordan Industries Headquartered in Deerfield, Ill., Jordan Industries Inc. -- http://www.jordanindustries.com/ -- through its plastic segment, serves a broad range of wholesale and retail markets within the highly-fragmented specialty plastics industry. The group primarily designs, manufactures and sells folder and application display holders, plastic injection-molded hardware and office supply products, extruded vinyl chairmats, and safety reflectors for bicycles and commercial truck manufacturers. The auto aftermarket segment, on the other hand, is focused primarily on the remanufacture and supply of torque converters to the automotive aftermarket parts industry. KEPLER HOLDINGS: Moody's Rates $200 Million Senior facility at Ba2 ------------------------------------------------------------------ Moody's Investors Service has assigned a definitive Ba2 rating to the $200 million senior secured term loan facility of Bermuda- domiciled Kepler Holdings Limited following review of final executed documents. The outlook for the rating is stable. This definitive rating replaces the provisional rating previously assigned on Feb. 26, 2007. The privately-placed senior secured term loan facility, which is being syndicated to financial institutions and other institutional lenders, is sponsored by Hannover Ruckversicherung AG and its affiliates, E+S Ruckversicherung AG and Hannover Re Limited, for natural catastrophe risks. Investors will provide aggregate catastrophe excess of loss reinsurance protection -- on an indemnity basis -- to Hannover Re for the portion of losses in excess of a stipulated attachment point up to a stipulated exhaustion point. The annual attachment and exhaustion probabilities will be 120bps and 40bps, respectively. The gross dollar values corresponding to these points will be based on the average of the Kepler portfolio annual aggregate exceedance curves as of January 1 and July 1 of each year. The gross dollar values will be determined once in 2007 and will be reset in 2008 to keep the attachment and exhaustion probabilities constant. Incurred losses and incurred but not reported losses will be included only in the final commutation calculation which will occur no later than June 30, 2009. The rating for the term loan is supported by a probabilistic analysis -- using a custom financial model -- to determine both the probability of loss P(D) and expected loss E(L) to Kepler Holdings' lenders over the two risk periods. This approach involves these steps: * assessing the promise of interest and principal to investors; * examining potential loss scenarios and their associated probabilities; * calculating P(D) and E(L) relative to the promised interest and principal; * comparing P(D) and E(L) to those of a set of benchmark securities with the same average duration, roughly 2.3 years, in order to arrive at a rating. Moody's has made certain probabilistic assumptions in its financial model with regard to: * the risk of overstated reserves at the time of commutation; * the uncertainty underlying the annual exceedance curve; * Hannover's ability to pay quarterly reinsurance premiums (e.g., interest payments) and to make the collateral trust whole for any investment losses; and * the investment performance of the collateral assets. The rating also reflects qualitative considerations such as Hannover's option to buy reinsurance on its retained share, the risk that reinsurers, including Hannover Re, may relax contract terms and conditions as the market becomes more competitive, and the fact that segregated cell technology has never been tested in bankruptcy. Moody's analysis is sensitive to assumptions about the overall annual aggregate exceedance probability curve. As such, Moody's has increased AEP modeled losses by various percentages. While the Kepler portfolio is designed to be highly modellable using industry vendor models, Hannover mainly uses aggregate-level models, instead of detailed-level models, which means that it relies largely on industry average assumptions -- instead of property specific information -- to assemble its AEP curves. Vendor models also do not capture certain contract elements such as loss adjustment expenses and extra-contractual obligations, which are covered under this excess of loss agreement. Further, the Kepler portfolio has significant exposure to regions outside the U.S., particularly to European windstorms, where data quality tends to be less detailed. That said, Hannover does perform a number of data quality checks before starting the vendor models, especially for US business where about 30% of the underlying treaties are modeled using detailed-level models. The company uses a data quality tool to analyze detailed loss data supplied by clients and, in general, prefers not to rely solely on client data. Moody's also acknowledges some of the conservatism that Hannover embeds into its practices such as aggregating exposures on a peril/territory level first before deriving the overall AEP curve. This introduces conservatism into the process by not allowing for the potential erosion of aggregate limits and/or limited reinstatements across different peril/territory classes. Further, Hannover assumes full correlation between exposures modeled using different approaches or vendor models. Moody's also views favorably that an assessment of Hannover's aggregation management and catastrophe modeling practices was done by an independent third party. The rating will be monitored quarterly to reflect the build-up of losses that have occurred up to that time. If a meaningful catastrophe event occurs, Moody's will reconstitute the overall AEP curve using the curves for individual perils and territories that are relevant for the remainder of the year. The financial model will be updated to reflect this new curve along with an estimated build-up of losses and any anticipated changes to Hannover's credit profile. The probability of default and expected loss to lenders will be updated, and Moody's will take rating actions, if any, accordingly. The Kepler portfolio represents roughly 80% of Hannover Re's entire property catastrophe reinsurance book. European windstorm and U.S. hurricane perils are the biggest contributors to modeled losses, particularly in the tails. Roughly three-quarters of the underlying business is transacted at January 1, such that Moody's expects only modest deviation from the projected portfolio for 2007. Rating assigned with a stable outlook: * Kepler Holdings Limited -- $200 million senior secured term loan facility due June 2009 at Ba2. Kepler Holdings Limited is a newly formed Bermuda exempted company, wholly owned by a charitable purpose trust. Kepler Holdings has entered into the $200 million senior secured credit facility, the proceeds of which are deposited into a segregated account, Kepler Re. Kepler Re is a newly formed segregated account of Kaith Re Ltd., an existing licensed Class 3 Bermuda reinsurer and Bermuda segregated accounts company. Kaith Re, on behalf of Kepler Re, has entered into an aggregate indemnity catastrophe excess of loss reinsurance agreement with Hannover Re. LAND O'LAKES: Earns $44.5 Million in Quarter Ended December 31 -------------------------------------------------------------- Land O'Lakes Inc. reported net earnings of $44.5 million on sales of $1.9 billion for the fourth quarter ended Dec. 31, 2006, compared with a net loss of $1.6 million on sales of $2 billion for the fourth quarter of 2005. Full-year sales were $7.3 billion, with net earnings of $88.7 million, compared to sales of $7.6 billion and net earnings of $128.9 million for 2005. Net earnings for 2005, however, included a $69.7 million gain on the company's sale of its ownership position in CF Industries Inc. Excluding that gain, net earnings were up 50 percent. The decrease in net sales was primarily attributed to a $442.8 million decrease in net sales in the Dairy Foods segment due to lower milk, butter, and cheese commodity markets in 2006 compared to 2005. This decline was partially offset by increases in sales in the Seed and Feed segments of $102.1 million and $124.5 million, respectively, due to higher volumes as well as higher commodity and product prices in 2006 compared to 2005. Gross profit increased to $660.9 million in 2006 compared to $585 million in 2005, primarily due to a $52.8 million improvement in the Dairy Foods segment as a result of improved margins and volumes as well as improved industrial operations and unrealized hedging gains in 2006 compared to unrealized hedging losses in 2005. Increases in the Feed and Seed segments due to volume improvements, margin increases and unrealized hedging gains in 2006 also improved gross profit. Total EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was $250.1 million in 2006, compared to EBITDA of $311.6 million one year ago. Like net earnings, 2005 total EBITDA includes last year's gain on the CF Industries sale. Total balance sheet debt, including capital leases, was $708.3 million at the end of 2006, a $38.9 million improvement from total debt of $747.2 million at Dec. 31, 2005. At Dec. 31, 2006, the company's balance sheet showed $3,055.1 million in total assets, $2,101.8 million in total liabilities, $8.8 million in minority interests, and $944.5 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1cbd About Land O'Lakes Inc. Land O'Lakes Inc. -- http://www.landolakesinc.com-- is a national, farmer-owned food and agricultural cooperative. Land O'Lakes does business in all 50 states and more than 50 countries. It is a leading marketer of a full line of dairy-based consumer, foodservice and food ingredient products across the United States; serves its international customers with a variety of food and animal feed ingredients; and provides farmers and ranchers with an extensive line of agricultural supplies and services. Land O'Lakes also provides agricultural assistance and technical training in more than 25 developing nations. * * * Moody's Investors Service assigned a Ba2 Senior Secured Debt rating to Land O'Lakes Inc. on Sept. 21, 2006. Moody's also placed a Ba3 Rating to Land O'Lakes' Senior Unsecured Debt on Sept. 21, 2006. MALDEN MILLS: Court Converts Chap. 11 Case to Chap. 7 Liquidation ----------------------------------------------------------------- Malden Mills Industries Inc.'s Chapter 11 case has been officially changed to a Chapter 7 liquidation, a conversion requested by both the company and the U.S. Trustee overseeing its bankruptcy proceedings, Bankruptcy Law360 said on its Web site Tuesday. As reported in the Troubled Company Reporter on March 13, 2007, the Debtors told the U.S. Bankruptcy Court for the District of Massachusetts that they expect to wind-down their case through chapter 7 and that their Wind-Down request had been granted. The Debtors further said that the Wind-Down Order provided for General Electric Capital Corp.'s consent to the use of cash collateral in the form of sale proceeds to fund the chapter 11 expenses from the closing date through the conversion subject to the Wind-Down Budget. As reported in the Troubled Company Reporter on March 5, 2007, the Court approved the sale of the Debtors business to Chrysalis Capital Partners LLC for $44 million plus assumed liabilities. Bill Rochelle of Bloomberg News however reports that the sale didn't generate enough cash to fund a chapter 11 liquidation. About Malden Mills Based in Lawrence, Mass., Malden Mills Industries Inc. -- http://www.polartec.com/-- develops, manufactures, and markets Polartec(R) performance fabrics. Polartec(R) products range from lightweight wicking base layers to insulation to extreme weather protection and are utilized by the best clothing brands in the world. In addition, Polartec(R) fabrics are used extensively by all branches of the United States military, including the Army, Navy, Marine Corps, Air Force, and Special Operations Forces. The company also has operations in Germany, Spain, France and the U.K. The company filed for chapter 11 protection on Nov. 29, 2001 (Bankr. Mass. Case No. 01-47214). The Court confirmed the Debtor's plan on Aug. 14, 2003. The company and four of its affiliates filed their second chapter 11 petitions on Jan. 10, 2007 (Bankr. D. Del. Case Nos. 07-10048 through 07-10052). Laura Davis Jones, Esq., and Michael Seidl, Esq., at Pachulski, Stang, Ziehl Young, Jones & Weintraub, PC, represent the Debtors. Bruce F. Smith, Esq., Steven C. Reingold, Esq., and Michael J. Fencer, Esq., at Jager Smith P.C., and Eric E. Sagerman, Esq., and David J. Richardson, Esq., at Winston & Strawn LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets between $1 million to $100 million and estimated debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on May 10, 2007. On Jan. 12, 2007, the Delaware Bankruptcy Court transferred the case to the U.S. Bankruptcy Court for the District of Massachusetts (Case No. 07-40124). MATRITECH INC: Losses Cue PwC to Raise Going Concern Doubt ---------------------------------------------------------- PricewaterhouseCoopers LLP raised substantial doubt about Matritech Inc.'s ability to continue as a going concern citing recurring losses and negative cash flows from operations after auditing the company's financial statements as of Dec. 31, 2006, and 2005. The company had $11.9 million net loss on total revenues of $12.2 million for the year ended Dec. 31, 2006, as compared with a net loss of $7.9 million on total revenues of $10.4 million for the year ended Dec. 31, 2005. As of Dec. 31, 2006, the company listed total assets of $5.5 million, total liabilities of $8.3 million, and commitments and contingencies of $208,624, resulting to total stockholders' deficit $2.9 million. The company's December 31 balance sheet also showed strained liquidity with total current assets of $3.8 million and total current liabilities of $7.4 million. Accumulated deficit as of Dec. 31, 2006, was $109.9 million. Liquidity and Capital Resources The company has substantially increased its debt to about $10.2 million as of Jan. 31, 2007. Based on the company's negative working capital at Dec. 31, 2006, of $3.6 million plus funds received from its January 2007 private placement and its current forecast of cash utilization, the company expects to be able to fund operations into the second quarter of 2007, provided it pays interest and principal on its 2006 Secured Convertible Notes in stock as the company did in January, February and March, 2007. However, the company may not be able to raise needed capital on terms that are acceptable to the company, or at all. If the company raises funds on unfavorable terms, it may provide rights and preferences to new investors, which are not available to current shareholders. In addition, the company's existing financing arrangements contain anti-dilutive provisions, which may require the company to issue additional securities if certain conditions are met. If the company does not timely receive additional financing or does not receive an adequate amount of additional financing, it will be required to curtail expenses by reducing research and/or marketing or by taking other steps that could hurt its future performance, including but not limited to, the premature sale of some or all of its assets or product lines on undesirable terms, merger with or acquisition by another company on unsatisfactory terms or the cessation of operations. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1cab About Matritech Matritech Inc. (AMEX: MZT) is a biotechnology company that develops, manufactures, markets, distributes and licenses cancer diagnostic technologies and products. It is focused primarily on the early detection of various types of cancer because treatment options may be greater and/or more successful and treatment costs may be lower when tumors are detected in their early stages. The company's revenues are derived primarily from product sales. METCARE RX: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: Metcare Rx Pharmaceutical Services Group, L.L.C. 870 Pompton Avenue, Unit B-2 Cedar Grove, NJ 07009 Bankruptcy Case No.: 07-14612 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Metcare Rx-Ormond Beach Pharmaceutical 07-14614 Services, L.L.C. Metcare Rx-Orange City Pharmaceutical 07-14617 Services, L.L.C. Metcare Rx Laurel, L.L.C. 07-14618 Metcare Rx Pharmaceutical 07-14619 Services-MD, L.L.C. Metcare Rx, Inc. 07-14620 Type of Business: The Debtors form a full-service pharmacy management company that offers customized solutions and comprehensive pharmacy managed care services. See http://www.metcarerx.com/ Chapter 11 Petition Date: April 3, 2007 Court: District of New Jersey (Newark) Judge: Donald H. Steckroth Debtors' Counsel: Bruce J. Wisotsky, Esq. Norris, McLaughlin & Marcus, P.A. 721 Route 202-206 North Bridgewater, NJ 08807 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtors' 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Bellco $1,639,235 5500 New Horizons Boulevard North Amityville, NY 11701 Dechert, L.L.P. $194,161 P.O. Box 7247-6643 Philadelphia, PA 19170-6643 Metropolitan Health Networks, Inc. $130,000 One Clearlake Centre, 250 South Australian Avenue Suite 400 West Palm Beach, FL 33401 William Lord $37,500 QS/1 $36,421 G.E. Healthcare Financial Services $34,085 G.E. Capital $25,893 Lazar Levine & Felix, L.L.P. $21,930 Americorp Financial, L.L.C. $20,855 Goldstein Lewin & Co. $18,622 Research America $15,000 T-Mobile $14,122 Squire, Sanders & Dempsey, L.L.P. $12,824 Cuthill & Eddy, L.L.C. $12,555 Pepper Hamilton, L.L.P. $11,563 Par-Med Pharmaceuticals $11,540 N.T.S. $9,607 Benderson Development Co. $8,925 Damian & Valori, L.L.P. $8,256 Cbiz-McClain $7,000 METROLOGIC INSTRUMENTS: Moody's Cuts Corporate Family Rating to B3 ------------------------------------------------------------------ Moody's Investors Service downgraded Metrologic Instruments' corporate family rating and probability of default rating to B3 from B2 following the recent debt financed share repurchase. At the same time, Moody's assigned a B2 rating to the first lien secured credit facility, which is comprised of a $170 million term loan and a $35 million undrawn revolver, and a Caa2 rating to the $75 million senior secured second lien. Proceeds from the transaction were used to refinance $200 million of debt, consisting of a $125 million first lien and $75 million second lien, and to repurchase about $40 million of stock. The ratings on the existing first and second lien facilities will be withdrawn upon closing. The ratings outlook is stable. "The downgrade reflects Metrologic's aggressive financial policy of increasing its leverage to repurchase stock less than six months after the initial ratings were assigned" said Kevin Cassidy, Vice President/Senior Analyst at Moody's Investors Service. "The previous B2 corporate family rating was predicated on the expectation of the company reducing its leverage" Cassidy noted. Metrologic is moderately positioned in its current rating category with proforma adjusted leverage in excess of what Moody's would expect for a B3 rated company. "The company's ratings and/or outlook could be further revised down over the next year if the company is unable to meaningfully reduce its adjusted leverage or if it implements any additional financially aggressive policies." Cassidy added. The ratings for the two senior secured facilities reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B3, and a loss given default of LGD 3 for the first lien and LGD 5 for the second lien. The B2 rating of the first lien senior secured credit facility reflects an LGD3, 36% loss given default assessment as this facility is secured by a pledge of all of the company's assets and there is a significant amount of second lien debt below it. The Caa2 rating of the second lien reflects an LGD5, 86% loss given default assessment given that it is contractually subordinated to the first lien. Both the first lien and second lien benefit from the full guarantees of existing and future subsidiaries. Assigned: * $170 Million Senior Secured First Lien Term Loan, rated B2, LGD3, 36%; * $35 Million Revolving Credit Facility, rated B2, LGD3, 36%; * $75 Million Senior Secured Second Lien Term Loan, rated Caa2, LGD5, 86%; Downgraded: * Corporate family rating, to B3 from B2; and * Probability of default rating, to B3 from B2. These ratings will be withdrawn upon closing: * $35 Million Revolving Credit Facility, rated B1, LGD3, 33%; * $125 Million Senior Secured First Lien Term Loan, rated B1, LGD3, 33%; * $75 Million Senior Secured Second Lien Term Loan, rated Caa1, LGD5, 84% Headquartered in Blackwood, New Jersey, Metrologic Instruments, Inc. is a global supplier for data capture and collection hardware, hardware, optical solutions, and image processing software. The company revenue for the year ended Dec. 31, 2006, approximated $215 million. MKT INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: MKT, Inc. P.O. Box 23037 Chagrin Falls, OH 44023-0037 Bankruptcy Case No.: 07-12243 Chapter 11 Petition Date: April 3, 2007 Court: Northern District of Ohio (Cleveland) Judge: Randolph Baxter Debtor's Counsel: Kenneth J. Freeman, Esq. Kenneth J. Freeman Co., LPA 515 Leader Building 526 Superior Avenue Cleveland, OH 44114-1903 Tel: (216) 771-9980 Fax: (216) 771-9978 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Nu-Line Products, Inc. Trade Creditor $251,119 784 Bill Jones Industrial Drive Springfield, TN 37172 Yangzhou Carol-Well Auto Trade Creditor $232,359 Accessories Co., Ltd. Room 15-201 No. 84 Yuqi Street Yangzhou, Jiangsu, China California Bank & Trust Monies Loaned $96,030 2399 Gateway Oaks Drive Suite 110 Sacramento, CA 95833 Fifth Third Bank Real Estate $599,000 Secured: $529,119 Unsecured: $69,881 Pro-Tech Trade Creditor $51,419 Jerpbak Bayless Company Past Due Rent $20,006 American Creations Trade Creeitor $16,642 Purchase Power Office Expense $7,343 Yellow Transportation Trade Creditor $7,107 T-W Sales, Inc. Commission $6,651 Gerrity & Associates Commission $6,336 FEDEX Freight Delivery Services $5,775 United Parcel Service Trade Creditor $5,381 Transportation Support Commission $4,635 Service, Inc. Office Max Credit Office Expenses $4,384 Truck-Lite Delivery Service $4,031 King Sales and Marketing Commission $3,847 Toyota Motor Credit Corp. Vehicle $23,131 Secured: $19,350 Unsecured: $3,781 SS&G Financial Services, Inc. Accounting Services $3,620 PC Systems Trade Creditor $2,754 MORGAN STANLEY: Moody's Holds Ba1 Rating on Class N-SDF Certs. -------------------------------------------------------------- Moody's Investors Service upgraded the ratings of three classes and affirmed the ratings of seven classes of Morgan Stanley Capital I Inc., Commercial Pass-Through Certificates, Series 2006-XLF: -- Class A-1, $114,081,382, Floating, affirmed at Aaa -- Class A-2, $289,313,000, Floating, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class B, $34,238,000, Floating, upgraded to Aaa from Aa1 -- Class C, $53,259,000, Floating, upgraded to Aa1 from Aa2 -- Class D, $38,042,000, Floating, upgraded to Aa2 from Aa3 -- Class N-LAF, $11,000,000, Floating, affirmed at A3 -- Class O-LAF, $8,000,000, Floating, affirmed at Baa3 -- Class N-SDF, $2,000,000, Floating, affirmed at Ba1 -- Class N-W40, $3,500,000, Floating, affirmed at Baa2 The Certificates are collateralized by eight senior mortgage loan participations. As of the March 15, 2007, distribution date, the transaction's aggregate certificate balance has decreased by approximately 49.9% to $779.5 million from $1.6 billion at securitization as a result of the payoff of the John Hancock Complex Loan at $255.0 million, the $519.5 million partial prepayment of the Magazine Multifamily Portfolio Loan and amortization on the One Wilshire Loan. The remaining loans range in size from 2.2% to 22.8% of the pooled balance. Moody's is upgrading pooled Classes B, C and D due to increased credit support from the loan payoffs as well as the stable performance of the loans remaining in the pool. NAKOMA LAND: Trustee Taps CB Richard as Real Estate Broker ---------------------------------------------------------- Angelique Clark, the chapter 7 Trustee appointed in the Nakoma Land, Inc., and its debtor-affiliates' proceedings, seeks permission from the U.S. Bankruptcy Court for the District of Nevada to employ CB Richard Ellis Inc. as exclusive real estate broker. The Trustee tells the Court that the Debtors own real property commonly known as the Nakoma Resort and Spa located in Graegle in Plumas County, California. CB Richard will assist the Trustee in marketing and selling the property for the highest possible value. The property is currently valued at $18 million. The Trustee discloses that CB Richard will receive 4% of the gross purchase price up to $10 million; plus 3% that portion of the gross purchase price above $10 million. Jeff Woolson, a broker at CB Richard, assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Reno, Nevada, Nakoma Land, Inc., operates the Nakoma Resort in Plumas County, California. The Debtor along with its affiliates filed for chapter 11 protection on May 19, 2005 (Bankr. D. Nev. Case No. 05-51556). Alan R. Smith, Esq., at the Law Offices of Alan R. Smith represented the Debtors. When the Debtors filed for protection from its creditors, they listed total assets of $18,000,000 and total debts of $15,252,580. Angelique Clark was appointed as chapter 11 trustee on May 19, 2006. On June 20, 2006, the Court verbally converted the Debtors' cases to chapter 7 liquidation proceedings. Ms. Clark was as appointed as the chapter 7 trustee. Stephen R Harris, Esq., at Belding, Harris & Petroni, Ltd. Represents Ms. Clark. NATIONAL GAS: Chapter 11 Trustee Hires GSC as Energy Consultant --------------------------------------------------------------- Richard M. Hutson, II, Chapter 11 Trustee for National Gas Distributors, LLC, obtained permission from the U.S. Bankruptcy Court for the District of North Carolina to employ Claire P. Gotham and GSC Energy, Inc. as energy consultant and expert witness. The Trustee tells the Court that he chose Ms. Gotham citing that her substantial expertise and experience with issues involving trading, hedging and pricing of natural gas, which are of great importance to the estate's litigation. Ms. Gotham and GSC will provide additional litigation support services, specifically: a) review and analyze the Debtor's transactions with its suppliers, transporters and customers; b) analyze the factors relevant to the pricing of the natural gas to the Debtor's customers and others similarly situated; c) determine whether the Debtor received reasonably equivalent value in return for the natural gas transferred by the Debtor to the defendants within one year prepetition; d) determine whether the Debtor received equivalent value in return for incurring obligations to provide natural gas to certain defendants within one year prepetition; and e) prepare expert reports and testimony at deposition and at trial with respect to the foregoing. Ms. Gotham, president and shareholder of GSC Energy, will bill $200 per hour for this engagement. Ashmead Pringle, also of GSC Energy, will bill $250 per hour. Ms. Gotham assures the Court that the firm is "disinterested" as that term is defined is Section 101(14) of the Bankruptcy Code. National Gas Distributors, LLC -- http://www.gaspartners.com/-- supplied natural gas, propane, and oil to industrial, municipal, military, and governmental facilities. As of mid-December 2005, the company effectively ceased business operations due to inadequate remaining capital and its inability to arrange for the purchase and delivery of natural gas to its customers. The company filed for bankruptcy on January 20, 2006 (Bankr. E.D.N.C. Case No. 06-00166). Ocie F. Murray, Jr., Esq., at Murray Craven & Inman LLP represented the Debtor in its restructuring efforts. Richard M. Hutson, II, serves as the Chapter 11 Trustee, and is represented by Emily C. Weatherford, Esq., and John A. Northen, Esq., at Northen Blue LLP. When the Debtor filed for bankruptcy, it estimated between $1 million to $10 million in assets and $10 million to $50 million in debts. NBO SYSTEMS: Tanner LC Raises Going Concern Doubt ------------------------------------------------- Tanner LC raised substantial doubt about NBO Systems Inc.'s ability to continue as a going concern after auditing the company's financial statements as of Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses, working capital deficit of $13.9 million and an accumulated deficit of $46.1 million as of Dec. 31, 2006, and negative cash flows from operating activities of $2.6 million for the year ended Dec. 31, 2006. For the year 2006, the company incurred a net loss of $5.5 million on total revenues and other income of $11.6 million, as compared with a net loss of $5.8 million on total revenues and other income of $11.2 million for the prior year. As of Dec. 31, 2006, the company recorded total assets of $18.3 million and total liabilities of $31.5 million, resulting to total stockholders' deficit of $13.2 million. The company held unrestricted cash and cash equivalents of $941,562 and restricted cash of $15.2 million as of Dec. 31, 2006. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1cb5 NBO Systems Inc. -- http://www.nbo.com/-- develops and markets prepaid stored-value card programs that operate on the established payment systems operated by Visa and MasterCard (open networks) or on Discover (private dedicated networks). NEFF CORP: Lightyear Merger Deal Prompts S&P's Negative Watch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' corporate credit ratings on Neff Corp. and on its operating subsidiaries on CreditWatch with negative implications following the company's announcement that it has entered a definitive agreement to be acquired by Lightyear Capital LLC. Purchase price was not disclosed. Financial terms include a tender offer of the company's currently outstanding senior secured notes due 2012. The transaction is expected to close in the second quarter of 2007. At the same time, S&P affirmed the 'B-' senior secured debt rating on subsidiary Neff Rental LLC. The affirmation reflects the expectation that the company will tender for all of its outstanding bonds in conjunction with closing. The terms of the notes include a change of control provision which grants note holders the right to require the purchase of all or any part of the notes at 101% of their principal amount. Neff is a Miami-based equipment rental company operating primarily in the Sunbelt through 67 locations. S&P expect to resolve the CreditWatch upon review of the proposed capital structure, and the financial and operating strategies of the new financial sponsor. NEFF RENTAL: Neff Corp/Capital Deal Cues Moody's to Review Ratings ------------------------------------------------------------------ Moody's Investors Service is reviewing the ratings of Neff Rental LLC for possible downgrade in response to the Neff Corp.'s report that it has signed a definitive agreement to be acquired by Light year Capital LLC, a private equity firm, in a transaction valued at approximately $900 million including the assumption of certain liabilities. Ratings under review: * corporate family rating, B3; * probability of default, B3; and * second priority senior secured notes, Caa1, LGD4, 64%. The company's speculative grade liquidity rating remains at the SGL-3 level and is not affected by the current review. Moody's review is focusing on the impact that the proposed transaction will have on Neff's future capital structure, financial strategy and credit metrics. The review is also assessing the degree to which the company's operating strategy will be able to sustain earnings, cash flow generation and liquidity under the new leveraged capital structure. Certain debt obligations contain change of control provisions, and to the extent that any existing debt is redeemed in its entirety under change of control provisions Moody's will withdraw the ratings. Neff, headquartered in Miami, Florida, is a regional equipment rental company in the Southeast and Mid-Atlantic regions. OMEGA HEALTHCARE: Closes Public Offering of 7.13 Million Shares --------------------------------------------------------------- Omega Healthcare Investors, Inc. disclosed the closing of the underwritten public offering of 7,130,000 shares of Omega common stock at $16.75 per share, less underwriting discounts. The sale included 930,000 shares sold in connection with the exercise of an over-allotment option granted to the underwriters. Omega received approximately $113 million in net proceeds from the sale of the shares, after deducting underwriting discounts and estimated offering expenses. Omega intends to use the net proceeds of the offering of the shares to repay indebtedness under its senior revolving credit facility. UBS Investment Bank acted as sole book-running manager for the offering. Banc of America Securities LLC, Deutsche Bank Securities and Stifel Nicolaus acted as co-managers for the offering. A prospectus relating to these securities has been filed with the Securities and Exchange Commission. The prospectus may be obtained from: UBS Investment Bank Prospectus Department 299 Park Avenue New York, NY 10171 Headquartered in Timonium, Maryland, Omega HealthCare Investors, Inc. (NYSE:OHI) -- http://www.omegahealthcare.com/-- is a real estate investment trust investing in and providing financing to the long-term care industry. At Dec. 31, 2006, the company owned or held mortgages on 239 skilled nursing facilities and assisted living facilities with approximately 27,302 beds located in 27 states and operated by 32 third-party healthcare operating companies. * * * The company's 7% Senior Notes due 2014 has been assigned a Ba3 rating by Moody's Investors Service, and a BB rating by Standard & Poor's and Fitch Ratings. PAETEC CORP: Dec. 31 Balance Sheet Upside-Down by $93 Million ------------------------------------------------------------- PAETEC Corp. reported 2006 fourth quarter and full year financial and operating results. At Dec. 31, 2006, the company's balance sheet showed total assets of $379,740,000 and total liabilities of $473,055,000, resulting in a stockholders' deficit of $93,315,000. The stockholders' deficit for the same period last year was $50,618,000. Total revenue for the 2006 fourth quarter increased 12.9% to $151.5 million from $134.2 million for the 2005 fourth quarter. Net income for the 2006 fourth quarter was $2.6 million compared to net income of $5.9 million for the fourth quarter of 2005, resulting primarily from increased interest expense. Net income was $7.8 million for 2006 compared to $14.5 million for 2005. The decrease was primarily attributable to increased interest expense associated with the indebtedness incurred in connection with the June 2006 leveraged recapitalization, as well as $10.5 million in one-time recapitalization transaction charges. Capital Expenditures PAETEC continued to invest in expansion of its network and product offerings during 2006. Capital expenditures for 2006 increased to $49.3 million from $38.2 million in 2005. Approximately $8 million in capital expenditures was used for new switching infrastructure investments in Newark, New Jersey, and Tampa, Florida, as well as investments in expanding the MPLS and Voice over IP networks. US LEC Merger On Feb. 28, 2007, US LEC Corp. and PAETEC Corp. completed a planned merger transaction. The combined company will conduct business as PAETEC Holding Corp. Under the terms of the merger agreement, US LEC stockholders are receiving one share of PAETEC common stock for each share of US LEC common stock, and PAETEC Corp. stockholders are receiving 1.623 shares of PAETEC common stock for each share of PAETEC Corp. common stock. US LEC and PAETEC Corp. stockholders holding stock certificates will soon receive share exchange instructions. PAETEC obtained $850 million of new credit facilities at the closing of the merger transaction. PAETEC Corp. and US LEC, which became PAETEC subsidiaries as a result of the merger transaction, used $800 million of facility proceeds and cash on hand to refinance substantially all of their senior secured indebtedness and to repurchase all outstanding shares of US LEC convertible preferred stock. About PAETEC Communications Headquartered in Fairport, New York, PAETEC Communications, Inc. - - http://www.paetec.com/-- supplies communications solutions to medium and large businesses and institutions. PAETEC offers personalized solutions that include a comprehensive suite of Voice over Internet Protocol services delivered over its Private-IP MPLS network. PAETEC serves more than 15,000 core business customers across the U.S. PROTECTION ONE: Closes Merger Transaction with Integrated Alarm --------------------------------------------------------------- Protection One, Inc. and Integrated Alarm Services Group disclosed the closing of their merger, pursuant to which IASG will merge with a wholly owned subsidiary of Protection One. In addition, Protection One stock ceased trading on the OTC Bulletin Board and commenced trading on the Nasdaq(R) Global Market. With its move to Nasdaq, Protection One's trading symbol changed to PONE. On March 27, 2007, IASG shareholders voted overwhelmingly in favor of the merger, which received 99.9% of the 17.7 million shares cast. Pursuant to the merger, shareholders of IASG will receive 0.29 shares of Protection One, Inc. common stock for each share of IASG common stock owned, plus cash for any fractional shares. Approximately 7.1 million shares of Protection One common stock will be issued resulting in a total of 25.3 million shares outstanding, of which IASG and Protection One shareholders will own approximately 28% and 72%, respectively. Outlook With the completion of the merger, Protection One assumes ownership of Criticom International, which will combine with Protection One's wholesale monitoring provider, CMS, and will soon operate under a new name, Criticom Monitoring Services(TM). Protection One will continue operating under the name Protection One(R), operating under the name Network Multifamily(R). In total, the merged company, which will remain based in Lawrence, Kansas, will have 73 branches across the country, six state-of- the-art monitoring response centers, and a dedicated disaster recovery center. Management believes that larger scale operations, elimination of redundancies and greater purchasing power generated by this merger will, within 12 months, result in net savings of $11 million to $13 million on an annualized basis. On a combined basis, Protection One and IASG had revenues and adjusted EBITDA of $364.9 million and $106.0 million, respectively, for the 12-month period ended Dec. 31, 2006. As of Dec. 31, 2006, Protection One and IASG on a combined basis had recurring monthly revenue, a well known valuation metric used for monitoring services companies, of $26.9 million. "Our successful completion of this merger paves the way to create a leading security monitoring services company with a diversified portfolio of security assets," Richard Ginsburg, President and CEO of Protection One, said. "It is a logical step for both Protection One and IASG and one that we believe will create value for shareholders, enhanced services for our customers and a growing company, with many new opportunities, for our employees. I would also like to thank IASG's shareholders for supporting the merger so decisively." The companies began merging operations on April 2, 2007, with a transition period occurring before IASG residential and commercial customers will begin seeing the Protection One name as their service provider and before Protection One will begin servicing or billing customers. In addition, Criticom dealers will soon receive information about the specific benefits of this merger for them. New Board Members As part of the merger closing, current IASG Board members, Arlene M. Yocum and Raymond C. Kubacki, will join the new Protection One Board of Directors. Protection One expects to announce the appointment of a ninth member to the board shortly. About Integrated Alarm Integrated Alarm Services Group Inc. (NASDAQ: IASG) -- http://www.iasg.us/provides total integrated solutions to independent security alarm dealers located throughout the United States to assist them in serving the residential and commercial security alarm market. IASG's services include alarm contract financing including the purchase of dealer alarm contracts for its own portfolio and providing loans to dealers collateralized by alarm contracts. IASG, with approximately 4,000 independent dealer relationships, is also the largest wholesale provider of alarm contract monitoring and servicing. About Protection One Headquartered in Lawrence, Kansas, Protection One Inc. (Nasdaq: PONE, previously OTC Bulletin Board: PONN) -- http://www.protectionone.com/-- provides installation, maintenance and monitoring of these state-of-the-art, user- friendly fire and burglar alarm systems. Network Multifamily, the company's wholly owned subsidiary, is the largest and oldest monitored security provider to the multifamily housing market. Protection One's 2,300 professionals serve its customers from more than 64 branch offices and three state-of-the-art monitoring facilities. PROTECTION ONE: Merger Cues Moody's to Hold B2 Corp. Family Rating ------------------------------------------------------------------ Moody's Investors Service assigned a B3 rating to Protection One Alarm Monitoring Inc.'s new $115 million second lien notes and upgraded the ratings on the $300 million senior secured term loan B due 2012 and $25 million revolver due 2010 to Ba3 from B1 following the consummation of the merger with Integrated Alarm Services Group, Inc. Concurrently, Moody's affirmed the B2 corporate family rating, B2 probability of default rating and Caa1 rating on its $110 million senior subordinated notes due 2009. The rating outlook is stable. The upgrade concludes the revolver and term loan ratings review for possible upgrade that began on Dec. 22, 2006. "The upgrade of the ratings on the revolver and term loan reflects the new $115 million second lien notes due 2011 issued by Protection One, proceeds of which, along with $10 million in cash, were used to redeem Integrated Alarm Services Group, Inc.'s $125 million second lien notes due 2011" said Sidney Matti, Analyst at Moody's. Additionally, Moody's assigned a B3 rating to the newly issued $115 million second lien notes reflecting the amount of first lien secured debt ahead of the second lien notes. The affirmation of the B2 Corporate Family Rating reflects Moody's expectations that Protection One's credit metrics will remain in-line with the company's existing financial profile and the B2 rating category. Pro forma for the transaction, Protection One's adjusted debt to EBITDA will decline to 5.8x from the current 5.9x for the twelve months ended Dec. 31, 2006. Additionally, pro forma EBITDA to interest expense will slightly decline to 1.7x associated with the additional interest expense as part of the transaction from 1.8x for the twelve months ended Dec. 31, 2006. Moody's last rating action on Protection One was on Dec. 22, 2006, when the B1 ratings on its $25 million revolver due 2010 and $300 million term loan B due 2012 were placed on review for possible upgrade. Assigned: * B3, LGD5, 72% rating on $115 million second lien notes due 2011. Upgraded: * $25 million senior secured revolver due 2010 to Ba3, LGD2, 26% from B1, LGD3, 36%; and * $300 million term loan B due 2012 to Ba3, LGD2, 26% from B1, LGD3, 36%. Affirmed: * Caa1, LGD6, 91% from LGD5, 89% rating on the $110 million senior subordinated notes due 2009; * B2 Probability of Default Rating; and * B2 Corporate Family Rating. Headquartered in Lawrence, Kansas, Protection One Alarm Monitoring, Inc. installs, monitors and maintains security alarms catering to residential, commercial, multifamily and wholesale customers. For the fiscal year ended Dec. 31, 2006, the company reported approximately $271 million in revenues. ROBECO CDO: Moody's Pares Rating on Class B-2 Notes to B1 from Ba2 ------------------------------------------------------------------ Moody's Investors Service downgraded these notes issued by Robeco CDO II Limited: * The $22,000,000 Class B-2 Notes Due 2013 -- Prior Rating: Ba2, on watch for possible downgrade -- Current Rating: B1 According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's underlying collateral pool. As of the February 2007 trustee report, the concentration of securities with Moody's Rating of Caa1 or lower is 17.35%. ROSEDALE MEDICAL: Case Summary & Five Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Rosedale Medical Group, LLC 14330 Oakhill Park Lane, Suite 200 Huntersville, NC 28078 Bankruptcy Case No.: 07-30718 Chapter 11 Petition Date: April 3, 2007 Court: Western District of North Carolina (Charlotte) Judge: J. Craig Whitley Debtor's Counsel: John W. Taylor, Esq. Taylor & Associates P.O. Box 472827 Charlotte, NC 28247 Tel: (704) 540-3622 Fax: (704) 540-3623 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Suntrust Bank Loan $249,957 P.O. Box 4418 MC 0039 Atlanta, GA 30302 City County Tax Collector Taxes $35,280 McGuireWoods, LLC Legal Fees $13,324 Rosedale Commons Property Dues $14,570 Owners Association A-Pro Lawn Care Service Trade Debt $6,070 SACO I: S&P Puts Default Rating on 2004-1 Class B-2 Loans --------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three classes from SACO I Trust's series 2004-1 and 2004-2. Concurrently, the ratings on the B-4 classes from series 2005-8, 2005-WM2, and 2005-WM3 were lowered to 'B' from 'BB' and placed on CreditWatch with negative implications. At the same time, the rating on class B-2 from series 2004-1 was lowered to 'D' from 'CCC'. In addition, the ratings on class B-2 from series 2004-2 and class B-4 from series 2005-7 were lowered to 'CCC' from 'B' and removed from CreditWatch, where they were placed with negative implications on Oct. 18, 2006, and Jan. 18, 2007, respectively. Moreover, various ratings from series 2005-WM2, 2005-WM3, 2005-8, 2006-1, 2006-2, 2006-3, 2006-4, 2006-5, 2006-6, 2006-7, and 2006-8 were placed on CreditWatch negative. Lastly, the ratings on the remaining classes from various SACO I Trust series were affirmed. The upgrades of class B-2 from series 2004-1 and classes M-1 and M-2 from series 2004-2 reflect a significant increase in credit support due to the paydown of the senior classes and the shifting interest feature of the transactions. Before these transactions reach their step-down dates, the most senior classes outstanding will continue to receive all principal payments. After the step- down date, the deals will likely continue to pay down sequentially because of failed cumulative loss and delinquency triggers. As of the March 2007 remittance period, cumulative losses for series 2004-1 were 3.42% of the original pool balance, and cumulative losses for series 2004-2 were 3.78% of the original pool balance, both significantly higher than the trigger threshold of 1.75% (Before the deal reaches 48 months of seasoning, the threshold is 1.75%; from months 48 to 60, the threshold is 2.25%; from months 60 to 72, the threshold is 2.75%; and after the 72nd month, the threshold remains 4.5%). The shifting interest feature of the transactions will increase the credit support percentages for these upgraded classes. Current credit support for the classes with raised ratings has increased to an average of 2.72x, the level required for the higher rating. The downgrades and negative CreditWatch placements reflect the deteriorating collateral performance of these transactions. Credit support for these deals is derived from a combination of subordination, excess interest, and overcollateralization (O/C). Realized losses have been outpacing excess interest spread to an extent that has reduced credit enhancement to levels that are not sufficient to support the previous ratings on the downgraded classes. The rating on class B-2 from series 2004-1 was lowered to 'D' from 'CCC' because of principal write-downs in the past three distribution periods. For the 16 pools with negative rating actions, series 2004-1, 2004-2, 2005-7, 2005-8, 2005-WM2, 2005- WM3, 2006-1, 2006-2 (groups 1 and 2), 2006-3, 2006-4, 2006-5 (groups 1 and 2), 2006-6, 2006-7, and 2006-8, cumulative losses ranged from 0.11% (2006-8) to 6.23% (2005-WM3) of the original pool balances. Severe delinquencies (90-plus days, foreclosure, and REO) ranged from 2.91% (2006-8) to 8.76% (2006-5, group 2) of the current pool balances. Total delinquencies ranged from 6.63% (2006-8) to 15.53% (2005-WM2) of the current pool balances. All of these deals contain primarily second-lien loans as collateral. The ratings on class B-2 from series 2004-2 and class B-4 from series 2005-7 were removed from CreditWatch because they were lowered to 'CCC'. According to Standard & Poor's surveillance practices, ratings lower than 'B-' on classes of certificates or notes from RMBS transactions are not eligible to be on CreditWatch negative. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings. These transactions were initially backed by either subprime/Alt-A closed-end second- lien mortgage loans or home equity lines of credit. The guidelines used in the origination process generally employed standards intended to assess the credit risk of borrowers with imperfect credit histories or relatively high ratios of monthly mortgage payments to income. Ratings Raised SACO I Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-1 B-1 A BBB 2004-2 M-1 AAA AA 2004-2 M-2 AA A Ratings Lowered and Placed on Creditwatch Negative SACO I Trust Rating ------ Series Class To From ------ ------ -- ----- 2005-WM2 B-4 B/Watch Neg BB 2005-WM3 B-4 B/Watch Neg BB 2005-8 B-4 B/Watch Neg BB Rating Lowered SACO I Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-1 B-2 D CCC Rating Lowered and Removed from Creditwatch Negative SACO I Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-2 B-2 CCC B/Watch Neg 2005-7 B-4 CCC B/Watch Neg Ratings Placed on Creditwatch Negative SACO I Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-WM2 B-3 BBB-/Watch Neg BBB- 2005-WM3 B-3 BBB-/Watch Neg BBB- 2006-1 M-4 BBB/Watch Neg BBB 2006-2 I-B-4 BB+/Watch Neg BB+ 2006-2 II-B-3 BBB-/Watch Neg BBB- 2006-2 II-B-4 BB+/Watch Neg BB+ 2006-3 B-3 BBB-/Watch Neg BBB- 2006-3 B-4 BB+/Watch Neg BB+ 2006-4 B-3 BBB-/Watch Neg BBB- 2006-4 B-4 BB+/Watch Neg BB+ 2006-5 I-B-3 BBB-/Watch Neg BBB- 2006-5 I-B-4 BB+/Watch Neg BB+ 2006-5 II-B-4 BB+/Watch Neg BB+ 2006-6 B-3 BBB-/Watch Neg BBB- 2006-6 B-4 BB+/Watch Neg BB+ 2006-7 B-3 BBB-/Watch Neg BBB- 2006-7 B-4 BB+/Watch Neg BB+ 2006-8 B BB/Watch Neg BB Ratings Affirmed SACO I Trust Series Class Rating ------ ----- ------ 2004-1 A-IO AAA 2004-1 M-2 AAA 2004-2 A-1, A-2, A-3 AAA 2004-2 B-1 BBB 2005-5 I-A AAA 2005-5 I-M-1 AA 2005-5 I-M-2 AA- 2005-5 I-M-3 A+ 2005-5 I-M-4 A 2005-5 I-M-5 A- 2005-5 I-B-1 BBB+ 2005-5 I-B-2 BBB 2005-5 I-B-3 BBB- 2005-5 I-B-4 BB 2005-7 A AAA 2005-7 M-1 AA 2005-7 M-2 AA- 2005-7 M-3 A+ 2005-7 M-4 A 2005-7 M-5 A- 2005-7 B-1 BBB+ 2005-7 B-2 BBB 2005-7 B-3 BBB- 2005-8 A-1, A-2, A-3 AAA 2005-8 M-1 AA 2005-8 M-2 AA- 2005-8 M-3 A+ 2005-8 M-4 A 2005-8 M-5 A- 2005-8 B-1 BBB+ 2005-8 B-2 BBB 2005-8 B-3 BBB- 2005-9 A-1, A-2, A-3 AAA 2005-9 M-1 AA+ 2005-9 M-2 AA 2005-9 M-3 AA- 2005-9 M-4 A+ 2005-9 M-5 A 2005-9 M-6 A- 2005-9 B-1 BBB+ 2005-9 B-2 BBB 2005-9 B-3 BBB- 2005-9 B-4 BB+ 2005-10 I-A AAA 2005-10 I-M A- 2005-10 I-B-1 BBB+ 2005-10 I-B-2 BBB 2005-10 I-B-3 BBB- 2005-10 I-B-4 BB+ 2005-10 II-A-1, II-A-2, II-A-3 AAA 2005-10 II-M-1 AA+ 2005-10 II-M-2 AA 2005-10 II-M-3 AA- 2005-10 II-M-4 A+ 2005-10 II-M-5 A 2005-10 II-M-6 A- 2005-10 II-B-1 BBB+ 2005-10 II-B-2 BBB 2005-10 II-B-3 BBB- 2005-10 II-B-4 BB+ 2005-GP1 A-1, A-2, M-1 AAA 2005-GP1 M-2 BBB- 2005-GP1 B-1 BB+ 2005-GP1 B-2 BB 2005-GP1 B-3 BB- 2005-GP1 B-4 B+ 2005-WM2 A-1, A-2, A-3 AAA 2005-WM2 M-1 AA 2005-WM2 M-2 AA- 2005-WM2 M-3 A+ 2005-WM2 M-4 A 2005-WM2 M-5 A- 2005-WM2 B-1 BBB+ 2005-WM2 B-2 BBB 2005-WM3 A-1, A-2, A-3 AAA 2005-WM3 M-1 AA 2005-WM3 M-2 AA- 2005-WM3 M-3 A+ 2005-WM3 M-4 A 2005-WM3 M-5 A- 2005-WM3 B-1 BBB+ 2005-WM3 B-2 BBB 2006-1 A AAA 2006-1 M-1 A 2006-1 M-2 A- 2006-1 M-3 BBB+ 2006-2 I-A AAA 2006-2 I-M A- 2006-2 I-B-1 BBB+ 2006-2 I-B-2 BBB 2006-2 I-B-3 BBB- 2006-2 II-A AAA 2006-2 II-M A- 2006-2 II-B-1 BBB+ 2006-2 II-B-2 BBB 2006-3 A-1, A-2, A-3 AAA 2006-3 M-1 AA+ 2006-3 M-2 AA 2006-3 M-3 AA- 2006-3 M-4 A+ 2006-3 M-5 A 2006-3 M-6 A- 2006-3 B-1 BBB+ 2006-3 B-2 BBB 2006-4 A-1, A-2, A-3 AAA 2006-4 M-1 AA+ 2006-4 M-2 AA 2006-4 M-3 AA- 2006-4 M-4 A+ 2006-4 M-5 A 2006-4 M-6 A- 2006-4 B-1 BBB+ 2006-4 B-2 BBB 2006-5 I-A AAA 2006-5 I-M-1 AA+ 2006-5 I-M-2 AA 2006-5 I-M-3 AA- 2006-5 I-M-4 A+ 2006-5 I-M-5 A 2006-5 I-M-6 A- 2006-5 I-B-1 BBB+ 2006-5 I-B-2 BBB 2006-5 II-A-1, II-A-2, II-A-3 AAA 2006-5 II-M-1 AA+ 2006-5 II-M-2 AA 2006-5 II-M-3 AA- 2006-5 II-M-4 A+ 2006-5 II-M-5 A 2006-5 II-M-6 A- 2006-5 II-B-1 BBB+ 2006-5 II-B-2 BBB 2006-5 II-B-3 BBB- 2006-6 A AAA 2006-6 M-1 AA+ 2006-6 M-2 AA 2006-6 M-3 AA- 2006-6 M-4 A+ 2006-6 M-5 A 2006-6 M-6 A- 2006-6 B-1 BBB+ 2006-6 B-2 BBB 2006-7 A AAA 2006-7 M-1 AA+ 2006-7 M-2 AA 2006-7 M-3 AA- 2006-7 M-4 A+ 2006-7 M-5 A 2006-7 M-6 A- 2006-7 B-1 BBB+ 2006-7 B-2 BBB 2006-8 A, A-IO AAA 2006-9 A AAA 2006-9 M-1 AA+ 2006-9 M-2 AA 2006-9 M-3 AA- 2006-9 M-4 A+ 2006-9 M-5 A 2006-9 M-6 A- 2006-9 B-1 BBB+ 2006-9 B-2 BBB 2006-9 B-3 BBB- 2006-9 B-4 BB+ 2006-10 A AAA 2006-10 M-1 AA+ 2006-10 M-2 AA 2006-10 M-3 AA- 2006-10 M-4 A+ 2006-10 M-5 A 2006-10 M-6 A- 2006-10 B-1 BBB+ 2006-10 B-2 BBB 2006-10 B-3 BBB- 2006-10 B-4 BB+ SAMHO TOUR: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Samho Tour, Inc. dba Samho Travel 3030 West Olympic Boulevard, Suite 104 Los Angeles, CA 90006 Tel: (310) 277-7400 Bankruptcy Case No.: 07-12691 Type of Business: The Debtor is tour operator and promoter. Chapter 11 Petition Date: April 3, 2007 Court: Central District Of California (Los Angeles) Judge: Thomas B. Donovan Debtor's Counsel: Lawrence A. Diamant, Esq. 1888 Century Park East, Suite 1500 Los Angeles, CA 90067-1702 Tel: (310) 277-7400 Fax: (310) 277-7584 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Express trade $100,000 P.O. Box 297612 Fort Lauderdale, FL 33329-7812 Dong Bu Tour trade $70,000 150-24 Northern Boulevard, Suite A3 & A4 Flushing, NY 11354 Charming Holidays trade $40,000 3360 Flair Drive, Suite 102 El Monte, CA 91731 J.J.J. Sales & Repair trade $30,000 Holiday Inn trade $10,000 J.J. Grand Hotel trade $10,000 PRO Air International, Inc. trade $10,000 Garden Suite Hotel trade $8,000 Edgewater Hotel trade $5,000 Riviera Hotel trade $5,000 Oxford Palace Hotel trade $5,000 Hebaragi & Lemi Business trade $5,000 B.F.I. Bangee Fleet, Inc. trade $3,000 Four Season Travel trade $2,000 G.T.T. trade $2,000 Vango Bus trade $1,500 Sundiago Charter trade $1,000 Luxury Bus trade $1,000 Holiday Motor Coach trade $1,000 Golden Lion trade $1,000 SANDRA ROTHMAN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Sandra Rothman S.L.P., P.C. dba Rothman Therapeutic Services 97-77 Queens Boulevard, 4th Floor Rego Park, NY 11374 Bankruptcy Case No.: 07-71129 Type of Business: The Debtor is a speech pathologist. She owns Rothman Therapeutic Services. See http://rothmantherapy.com/Home.htm Chapter 11 Petition Date: April 2, 2007 Court: Eastern District of New York (Central Islip) Debtor's Counsel: Anthony F. Giuliano, Esq. Pryor & Mandelup, L.L.P. 675 Old Country Road Westbury, NY 11590 Tel: (516) 997-0999 Fax: (516) 333-7333 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million The Debtor did file a list of its largest unsecured creditors. SGP ACQUISITION: Plan Confirmation Hearing Set for April 11 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware set a hearing on April 11, 2007, at 10:00 a.m., to consider confirmation of the Amended Plan filed by SGP Acquisition LLC, Kimolos II LP, and the Official Committee of Unsecured Creditors. Kimolos a non-debtor affiliate of SGP Acquisition. The Proponents tells the Court that the funds to be used to implement the Plan will be obtained from the Debtor's assets, which includes the Dunlop Settlement Proceeds and cash on hand the effective date, and funds to be contributed by Kimolos. Under the Amended Plan, Administrative Claims and Priority Tax Claims will be paid in full on the effective date. Holder of General Unsecured Claims will receive a pro rata share of the Debtor's available assets after all prior claims have been paid in full. Equity Interest holders will not receive nor retain any property and these interests will be cancelled. Headquartered in Greenville, South Carolina, SGP Acquisition, LLC -- http://www.slazengergolf.com/-- markets a wide array of premium golf apparel, golf balls, and related accessories. The Company filed for chapter 11 protection on November 30, 2004 (Bankr. D. Del. Case No. 04-13382). Laurie Polleck, Esq., at Jaspan Schlesinger Hoffman, and Mark A. Philip, Esq., at Benesch Friedlander Coplan & Aronoff, represent the Debtor. Francis A. Monaco, Jr., Esq., Joseph J. Bodnar, Esq., and Kevin J. Mangan, Esq., at Monzack and Monaco, P.A., represent the Official Committee of Unsecured Creditors. James M. Lawniczak, Esq., at Calfee Halter & Griswold LLP, represents Kimolos. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. SOLO CUP: Posts $373.2 Million Net Loss in Year Ended Dec. 31 ------------------------------------------------------------- Solo Cup Company reported a net loss of $373.2 million on net sales of $2,489.9 million for the year ended Dec. 31, 2006, compared with a net loss of $19.4 million on net sales of $2,431.6 million for the year ended Jan. 1, 2006. The increase in net sales reflects an increase in average realized sales price, partially offset by lower sales volumes. The increase in average realized sales price reflects price increases implemented over the past year in response to higher raw material costs for resin and paper. The volume decrease reflects general industry trends and shifts in the company's product mix as well as the effects of competitive pressure in the marketplace. Gross profit was $265.1 million for the fiscal year ended Dec. 31, 2006, a decrease of $44.1 million from the comparable period in 2005. This decrease primarily reflects the company's inability to fully recover raw material costs and higher energy and transportation costs. Selling, general and administrative expenses were $265.9 million for the fiscal year ended Dec. 31, 2006, versus $267.3 million for the fiscal year ended Jan. 1, 2006. This modest decrease is a result of lower integration expenses partially offset by increases in various professional expenses related to the new order management system, the development and implementation of the company's Performance Improvement Program, and the accounting restatement and related bank amendment process. Depreciation and amortization expense was $100.8 million, net interest expense was $90.7 million and capital expenditures were $65.1 million for the fiscal year ended Dec. 31, 2006. Commenting on the company's fiscal year 2006 results, Robert M. Korzenski, chief executive officer, said: ""Our results were impacted by a continued challenging industry environment and increased raw material costs as well as certain customer and product mix issues. However, we have taken steps to improve our manufacturing and supply chain efficiencies, decrease our selling, general and administrative expenses, reduce our debt burden, and optimize our sales and marketing organization. We have also launched an integrated Performance Improvement Program designed to address all key value drivers, accelerate our turnaround, leverage our strengths, and achieve meaningful and sustainable improvements in our results. Through these efforts, coupled with the significant recent additions to our senior management team, we expect to better position the company to meet our competitive challenges, improve our operational and financial performance, and create value for our investors in 2007 and beyond." In December 2006, the company entered into amendments to its first and second lien facilities which increased its borrowing capacity by $50 million, from $80 million to $130 million, under the term loan of its second lien facility, and which modified the financial covenants the company is required to meet. At Dec. 31, 2006, the company's balance sheet showed $1,542.4 million in total assets, $1,528.8 million in total liabilities, and $13.6 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1cbe About Solo Cup Company Solo Cup Company -- http://www.solocup.com/-- manufactures disposable foodservice products for the consumer/retail, foodservice, packaging, and international markets. Solo Cup has broad expertise in paper, plastic, and foam disposables and creates brand name products under the Solo, Sweetheart, Fonda, and Hoffmaster names. The company was established in 1936 and has a global presence with facilities in Asia, Canada, Europe, Mexico, Panama and the United States. * * * As reported in the Troubled Company Reporter on Mar. 13, 2007, Moody's Investors Service affirmed the 'B3' Corporate Family Rating of Solo Cup Company and revised the rating outlook to negative. SPECTRUM SIGNAL: Gets Going Concern Qualification from KPMG LLP --------------------------------------------------------------- Spectrum Signal Processing Inc. disclosed that its Annual Report on Form 20-F for the fiscal year ended Dec. 31, 2006, contain a going concern qualification from its independent accounting firm, KPMG LLP. As of Dec. 31, 2006, the company had cash and cash equivalents of $1.7 million and net working capital of $3.5 million. The company has an undrawn line of credit facility of up to Cdn$2.9 million. On Feb. 16, 2007, Spectrum reported the signing of a definitive agreement with Vecima Networks Inc., under which Vecima will acquire all the outstanding common shares of Spectrum. The transaction with Vecima will be carried out by way of a statutory plan of arrangement and must be approved by the British Columbia Supreme Court and by the affirmative vote of the holders of 75% of Spectrum's shares. The transaction is also subject to certain closing conditions, including the approval of the United States Department of State and the Committee on Foreign Investments in the United States well as the receipt of all other required regulatory approvals and customary closing conditions. The transaction is expected to close in April 2007. This statement is being made in compliance with Nasdaq Marketplace Rule 4350(b)(1)(B), which requires separate disclosure of receipt of an audit opinion that contains a going concern qualification. This statement does not represent any change or amendment to the company's 2006 financial statements or to its Annual Report on Form 20-F. About Spectrum Signal Based in Columbia, Maryland, Spectrum Signal Processing Inc. (TSX: SSY)(NASDAQ: SSPI) -- http://www.spectrumsignal.com/-- is a supplier of software-defined platforms for defense electronics applications. The company provides applications engineering services and modified commercial-off-the-shelf platforms to the US Government, its allies and its prime contractors. The company's products and services are optimized for military communications, signals intelligence, surveillance, electronic warfare and satellite communications applications. SPECTRUM SIGNAL: Restates Financial Results for Two Fiscal Years ---------------------------------------------------------------- Spectrum Signal Processing Inc. restated its financial results for its fiscal years ended Dec. 31, 2004 and 2005. This restatement pertains to U.S. generally accepted accounting principles and does not impact the company's financial results in accordance with Canadian GAAP. These are non-cash charges that do not impact the company's operations or cash flows. The restatement results from a recent interpretation by U.S. regulatory authorities of the U.S. GAAP contained in the Statement of Financial Accounting Standards 133, Accounting for Derivative Instruments and Hedging Activities. The interpretation under U.S. GAAP requires that, when a company's share purchase warrants have an exercise price denominated in a currency other than the company's functional currency, those share purchase warrants be classified as liabilities at their fair value with any changes in fair value being included in the calculation of net earnings. In these circumstances, the company would record a gain or loss in each period when the fair value of the share purchase warrants decreases or increases. As a result of this interpretation, the company will include a restatement of comparative figures in its U.S. GAAP financial statements for the year ended Dec. 31, 2006. The effect of the restatement is an increase to the company's 2004 net loss of $1.5 million and a decrease to the company's 2005 net loss of $792,000. For the year ended Dec. 31, 2006, the company will also include a gain of $27,000 related to the change in fair value of Canadian dollar denominated share purchase warrants during the period. As of Dec. 31, 2006 all but 207,931 of the Canadian dollar denominated share purchase warrants have been exercised or have expired. The remaining outstanding share purchase warrants have an estimated fair market value of $11,000, as calculated using the Black-Scholes option-pricing model, and are recorded as a current liability on the company's balance sheet. If the share purchase warrants are exercised, the fair value of the warrants at the date of exercise will be reclassified to stockholders' equity. As of Dec. 31, 2006, the cumulative effect of the issuance and exercise of the Canadian dollar denominated share purchase warrants is an increase to share capital, warrants and additional paid-in capital of $653,000. "This restatement relates to non-cash charges that do not impact Spectrum's operations or cash flows," Brent Flichel, Spectrum's president and chief executive officer stated. "The U.S. regulatory authorities have provided their interpretation of some complex accounting rules affecting the company's reported financial results. In the company's effort to provide transparent financial reporting, the company is providing this restatement information to the markets." About Spectrum Signal Based in Columbia, Maryland, Spectrum Signal Processing Inc. (TSX: SSY)(NASDAQ: SSPI) -- http://www.spectrumsignal.com/-- is a supplier of software-defined platforms for defense electronics applications. The company provides applications engineering services and modified commercial-off-the-shelf platforms to the US Government, its allies and its prime contractors. The company's products and services are optimized for military communications, signals intelligence, surveillance, electronic warfare and satellite communications applications. SYNIVERSE TECH: Increased Debt Cues Moody's Negative Outlook ------------------------------------------------------------ Moody's Investors Service changed Syniverse Technologies, Inc.'s outlook from stable to negative and affirmed the company's Ba3 corporate family rating. The company recently reported the debt financed acquisition of Billing Services Group's wireless data and financial clearing and settlement businesses for $290 million. The change in outlook reflects the increase in debt at time when Syniverse's core product offerings are experiencing pricing pressures and moderate declines in operating profit. Although the acquisition will likely bring synergies and growth to international operations, the increased leverage reduces flexibility as the company faces declines in its North American business. The outlook also reflects the expectation of continued debt financed acquisitions. Moody's views the BSG acquisition as providing a welcome diversification of revenues as well as elevating Syniverse into the number two position in the European GSM business. BSG will also bring a financial clearinghouse capability which is viewed as critical towards providing a unified open connectivity GSM offering. Moody's estimates that debt to EBITDA will increase from 2.6x to 4.0x pro forma for the acquisition. Moody's also estimates that 2006 free cash flow to debt falls from 23.6% to 13.5% pro forma for the acquisition due to the increased interest expense associated with the acquisition debt. Moody's has previously indicated that once the level falls below 15%, there could be downward ratings pressure. The Ba3 ratings reflect the company's leading market positions in the network and interoperability services businesses supporting the wireless telecommunication industry and strong cash flow generating capabilities. The ratings are constrained by the company's concentration of revenue derived from roaming traffic between domestic wireless operators and the pressures arising as the operators consolidate. Ratings for debt facilities will be determined after the company finalizes the capital structure. Moody's notes that committed financing has been provided by Lehman Brothers, Deutsche Bank and Bear, Stearns & Co. Individual debt instrument ratings could be downgraded depending on the final structure. The ratings could be downgraded if operating profits in the existing business continue to decline at a rate faster than the profits at the new business grow or if the company were to make additional large debt financed acquisitions. Alternately the outlook could be stabilized if the company is able to grow cash flows and increase free cash flow to debt to above 15% pro forma for the acquisition. Based in Tampa, Florida, Syniverse Technologies is a provider of technology outsourcing to wireless telecommunications carriers with 2006 revenues of $337 million. TABS 2007-7: Moody's Rates $32.5 Million Secured Notes at Ba2 ------------------------------------------------------------- Moody's Investors Service assigned ratings to notes issued by TABS 2007-7, Ltd.: * Aaa to the $65,550,000 Class X Senior Secured Fixed Rate Notes Due 2013; * Aaa to the $1,310,000,0001 Class A1S Variable Funding Senior Secured Floating Rate Notes Due 2047; * Aaa to the $352,500,000 Class A1J Senior Secured Floating Rate Notes Due 2047; * Aa2 to the $240,000,000 Class A2 Senior Secured Floating Rate Notes Due 2047; * A2 to the $80,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2047; * Baa1 to the $20,000,000 Class B1 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047; * Baa2 to the $77,500,000 Class B2 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047; * Baa3 to the $47,500,000 Class B3 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 and * Ba2 to the $32,500,000 Class C Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of RMBS Securities, CMBS Securities, other Asset-Backed Securities and Synthetic Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Tricadia CDO Management, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. TAHOMA CDO: Moody's Rates $5 Million Class E Senior Notes at Ba1 ---------------------------------------------------------------- Moody's Investors Service assigned ratings to notes issued by Tahoma CDO II, Ltd.: * Aaa to $300,000,000 Class A-1 Senior Secured Floating Rate Notes due 2047; * Aaa to $120,000,000 Class A-2 Senior Secured Floating Rate Notes due 2047; * Aa2 to $25,500,000 Class B Senior Secured Floating Rate Notes due 2047; * A2 to $23,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2047; * Baa2 to $11,500,000 Class D Senior Secured Deferrable Floating Rate Notes due 2047 and * Ba1 to $5,000,000 Class E Senior Secured Deferrable Floating Rate Notes due 2047. Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings are also based upon the transaction's legal structure and the characteristics of the collateral pool. Bear Stearns Asset Management Inc. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. TARGETED GENETICS: Ernst & Young Raises Going Concern Doubt ----------------------------------------------------------- Ernst & Young LLP raised substantial doubt about the ability of Targeted Genetics Corporation to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses and negative cash flows from operations due to its limited working capital. Net loss incurred for the year ended Dec. 31, 2006, was $34 million, as compared with a net loss of $19.2 million for the year ended Dec. 31, 2005. The company generated total revenues totaling $9.9 million in 2006, consisted of $8.1 million in collaborative revenues and $1.8 million in licensing revenues. Total revenues in 2005 totaled $6.9 million, which is solely from collaborative revenues. Operating expenses increased to $46.6 million in 2006, as compared with $26.2 million in 2005, due to a goodwill impairment charge of $23.7 million recorded in 2006. There was no goodwill impairment charge recorded in the prior year. As of Dec. 31, 2006, the company had total assets of $17.5 million and total liabilities of $12.1 million, resulting to total stockholders' equity of $5.4 million. It had cash and cash equivalents balances of $6.2 million at Dec. 31, 2006, as compared with $14.1 million at Dec. 31, 2005, and $34.1 million at Dec. 31, 2004. Accumulated deficit in 2006 increased to $284 million from $250 million in the prior year. The company expects to generate substantial additional losses for the foreseeable future, primarily due to the costs associated with funding its inflammatory arthritis clinical development program, developing and maintaining its manufacturing capabilities and developing its intellectual property assets. On Jan. 11, 2007, the company sold 2.2 million shares of its common stock in a private placement at a price of $4.00 per share and received net proceeds of about $8.1 million. In addition, in connection with the financing the company issued warrants to purchase up to 763,000 shares of its common stock. Goodwill and Other Intangible Assets When the company purchased Genovo in 2000, it recorded intangible assets of $39.5 million on its financial statements, which represented know-how, an assembled workforce and goodwill. Between 2000 and 2002, the company recognized $8.1 million of amortization of the goodwill and intangible assets. In 2002, the company implemented SFAS No. 142, "Goodwill and Other Intangible Assets." The company engaged an independent valuation firm to assist with the evaluation, including the assessment of its estimated fair value and the hypothetical purchase price allocations. The company periodically and annually on October 1st evaluate the carrying value of its goodwill in accordance with SFAS No. 142. It recognized a non-cash loss on impairment of goodwill during second quarter of 2006. As a result of a decline in its share price during June 2006, to a level, which reduced market capitalization to an amount less than the fair value of the company's net assets, it was required to perform an interim goodwill impairment test. As a result of this evaluation, the company recognized a non-cash impairment charge of $23.7 million, which is equal to the recorded value of goodwill in excess of its implied value. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1cb3 About Targeted Genetics Targeted Genetics Corporation (NasdaqCM: TGEN) in Seattle -- http://www.targen.com/-- is a clinical-stage biotechnology company. It develops and intends to commercialize a new class of therapeutic products called gene therapeutics. TECH DATA: Earns $36.1 Million in Quarter Ended December 31 ----------------------------------------------------------- Tech Data Corp. reported net income of $36.1 million for the fourth quarter ended Jan. 31, 2007, compared with net income of $29.5 million for the prior-year period, which includes income from discontinued operations of $1 million. Results for the fourth quarter ended Jan. 31, 2006, also included $6.8 million of restructuring charges and $4.4 million of consulting costs related to the company's European restructuring program. Excluding these charges and costs, non-GAAP net income for the fourth quarter of fiscal 2006 totaled $41.2 million, including $1 million in income from discontinued operations. Net sales for the fourth quarter ended Jan. 31, 2007, were $6.1 billion, an increase of 10.7% from net sales of $5.5 billion in the fourth quarter of fiscal 2006 and an increase of 12.7% compared to the third quarter of the current fiscal year. "We completed fiscal 2007 on a very positive note achieving record sales for the quarter and for the full year," commented Robert M. Dutkowsky, Tech Data's chief executive officer. "Our performance in Europe exceeded our expectations - the result of better-than- expected sales volume and a strengthening of the gross margin as we continue to drive improvements and stabilize our European operations. Our Canadian and Latin American operations performed exceptionally well, contributing to the America's solid fourth quarter performance. I'm very proud of the Tech Data team, and want to thank each and every one of them for their contributions this year. As we move forward in the new fiscal year, we will continue to leverage our infrastructure, concentrating on responsible growth in worldwide net sales and measured improvements in profitability." Fiscal Year Results Net sales for the fiscal year ended Jan. 31, 2007, were $21.4 billion, an increase of 4.7 percent from net sales of $20.5 billion in the fiscal year ended Jan. 31, 2006. On a regional basis, net sales in the Americas represented 46 percent of net sales, and increased 5.3 percent to $9.9 billion from $9.5 billion in the prior-year period. Europe represented 54 percent of net sales and increased 4.1 percent to $11.5 billion from $11 billion in the fiscal year ended Jan. 31, 2006. Gross margin for the fiscal year ended Jan. 31, 2007, was 4.70 percent, down from 4.99 percent in the prior-year period. The decline in gross margin was primarily attributable to challenges in the European operations, competitive market conditions in both regions, and to a much lesser extent, changes in customer and product mix. For the fiscal year ended Jan. 31, 2007, the company incurred an operating loss of $4.2 million compared with operating income of $163.3 million in the prior-year. The operating loss of $4.2 million included $136.1 million in goodwill impairment charges, absent in the previous year. Due to certain indicators of impairment within the company's European reporting unit, the company performed an impairment test for goodwill as of July 31, 2006. This testing included the determination of the European reporting unit's fair value using market multiples and discounted cash flows modeling. The company's reduced earnings and cash flow forecast for the European region resulted in the company determining that a goodwill impairment charge was necessary. The company incurred a net loss of $97 million for the fiscal year ended Jan. 31, 2007, compared with net income of $26.6 million in the prior-year period. Results of operations for the fiscal-year periods ended Jan. 31, 2007 and 2006, included $3.9 million and $3.6 million, respectively, of income from discontinued operations related to the sale of the Europe training business. At Jan. 31, 2007, the company's balance sheet showed $4.7 billion in total assets, $3 billion in total liabilities, and $1.7 billion in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Jan. 31, 2007, are available for free at http://researcharchives.com/t/s?1cbf About Tech Data Founded in 1974, Tech Data Corporation (NASDAQ GS: TECD) -- http://www.techdata.com/-- is a leading distributor of IT products, with more than 90,000 customers in over 100 countries. The company's business model enables technology solution providers, manufacturers and publishers to cost-effectively sell to and support end users ranging from small-to-midsize businesses to large enterprises. Tech Data is ranked 107th on the FORTUNE 500(R). * * * As reported in the Troubled Company Reporter on Dec. 19, 2006, Moody's Investors Service assigned a 'Ba2' rating to Tech Data Corporation's proposed offering of up to $350 million convertible senior notes due 2026 and affirmed the company's Ba1 corporate family rating and Ba1 probability of default rating. TK ALUMINUM: Unit Launches Tender Offer of EUR35 Mil. Senior Notes ------------------------------------------------------------------ Teksid Aluminum Luxembourg S.a r.l., S.C.A., an indirect subsidiary of TK Aluminum Ltd., has commenced a tender offer for a portion of its 11-3/8% Senior Notes due 2011 pursuant to an Offer to Purchase statement dated March 29, 2007. The tender offer will expire at 10:00 a.m., New York City time (3:00 p.m., London time), on April 27, 2007, unless extended or earlier terminated. Holders of Senior Notes who validly tender their Senior Notes prior to 10:00 a.m., New York City time (3:00 p.m., London time), on the Expiration Date, will receive 100% of the principal amount of the outstanding Senior Notes, plus accrued and unpaid interest thereon from the most recent payment of interest preceding the Payment Date up to, but not including, the Payment Date. All payments will be made on May 1, 2007, unless extended. The company will not spend more than EUR36,430,778 in the aggregate to purchase its outstanding Senior Notes at par, which amount includes the payment of the Purchase Price and Accrued Interest on the Payment Date. In the event that the aggregate principal amount of Senior Notes validly tendered and not validly withdrawn by Holders prior to the Expiration Date exceeds EUR35,150,000, the company will accept Senior Notes for payment on a pro rata basis from among such tendered Senior Notes. Any such pro rata allocation will be calculated by multiplying the principal amount of Senior Notes validly tendered via a tender instruction by a factor equal to the aggregate principal amount of the Senior Notes that the company is to purchase divided by the aggregate principal amount of the Senior Notes validly tendered and not validly withdrawn. Each offer to sell reduced in this manner will be rounded down to the nearest denomination of EUR50,000 and integral multiples of EUR1,000 in excess thereof. Any tendered Senior Notes not purchased due to proration will be returned to the Holder thereof as promptly as practicable after the Payment Date. There is no condition that any minimum amount of Senior Notes must be tendered in the Tender Offer for the Company to accept the Senior Notes for payment. Tenders of Senior Notes prior to the Expiration Date may be validly withdrawn at any time prior to 10:00 a.m., New York City time (3:00 p.m., London time), on the Expiration Date, but not thereafter unless the tender offer is terminated without any Senior Notes being purchased. The company's obligation to accept for payment and pay for the Senior Notes validly tendered pursuant to the tender offer is conditioned upon the satisfaction or waiver of various conditions described in the Statement. The trustee under the indenture governing the Senior Notes, has informed the company that all custodian and beneficial Holders of Senior Notes hold their Senior Notes through Euroclear or Clearstream, Luxembourg accounts and that there are no physical Senior Notes in non-global form. Accordingly, there are no letters of transmittal for the tender offer. Holders may tender their Senior Notes by submitting an election instruction notice through Euroclear and Clearstream, Luxembourg. The company will make letters of transmittal available to any Holders holding Senior Notes in physical form. Holders who believe that they are holding a Senior Note in physical form should contact the Luxembourg Tender Agent, The Bank of New York (Luxembourg) S.A., to obtain a letter of transmittal. About Teksid Aluminum Teksid Aluminum -- http://www.teksidaluminum.com/-- manufactures aluminum engine castings for the automotive industry. Principal products include cylinder heads, engine blocks, transmission housings and suspension components. The company operates 15 manufacturing facilities in Europe, North America, South America and Asia. The company maintains operations in Italy, Brazil and China. Until Sept. 2002, Teksid Aluminum was a division of Teksid S.p.A., which was owned by Fiat. Through a series of transactions completed between Sept. 30, 2002 and Nov. 22, 2002, Teksid S.p.A. sold its aluminum foundry business to a consortium of investment funds led by equity investors that include affiliates of each of Questor Management Company, LLC, JPMorgan Partners, Private Equity Partners SGR SpA and AIG Global Investment Corp. As a result of the sale, Teksid Aluminum is owned by its equity investors through TK Aluminum Ltd., a Bermuda holding company. * * * On Jan. 16, 2007, Moody's Investors Service placed TK Aluminum Ltd.'s long-term corporate family rating at Caa3. TRIMARAN VII: Moody's Rates $12.5 Million Class B-2L Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned ratings to notes and combination securities issued by Trimaran VII CLO Ltd.: * Aaa to the $333,000,000 Class A-1L Floating Rate Notes due June 2021; * Aaa to the $25,000,000 Class A-1LR Floating Rate Revolving Notes due June 2021; * Aa2 to the $35,000,000 Class A-2L Floating Rate Notes due June 2021; * A2 to the $30,000,000 Class A-3L Floating Rate Notes due June 2021; * Baa2 to the $18,500,000 Class B-1L Floating Rate Notes due June 2021; and * Ba2 to the $12,500,000 Class B-2L Floating Rate Notes due June 2021. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. Trimaran Advisors LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. TUPPERWARE BRANDS: Loan Reduction Prompts S&P to Hold BB Rating --------------------------------------------------------------- Standard & Poor's Ratings Services raised its recovery ratings on the senior secured credit facilities of Tupperware Brands Corp. to '2' from '3', indicating the expectation for substantial (80%- 100%) recovery of principal in the event of a payment default. At the same time, S&P affirmed the corporate credit and loan ratings at 'BB'. The rating action reflects improved recovery prospects for the bank lenders following a permanent reduction in the size of Tupperware's term loan. During 2006, Tupperware made $75.8 million in principal prepayments. As a result of the prepayments, the term loan outstanding balance is $669.2 million and the first required quarterly payment is now not due until Jan. 2, 2008. The outlook is stable. Tupperware had about $680 million of debt outstanding at Dec. 30, 2006. Ratings List Ratings Affirmed Tupperware Brands Corp. Corporate Credit Rating BB/Stable/-- Senior Secured Local Currency BB Ratings Raised To From Senior Secured Recovery Rating 2 3 VANGUARD CAR: Moody's Holds Corporate Family Rating at B1 --------------------------------------------------------- Moody's Investors Service is reviewing the ratings of ERAC USA Finance Company for possible downgrade following the report that Enterprise has entered into a definitive agreement to purchase Vanguard Car Rental Group Inc. and its rated subsidiary - Vanguard Car Rental USA Holdings, Inc. which operates the "National" and "Alamo" brands. The acquisition is subject to regulatory approval and is expected to be completed during the second half of 2007. Financial terms of the transaction have not been publicly disclosed. Moody's review of ERAC is focusing on the transaction's ultimate financial terms and legal structure. Key areas of consideration will include the amount of debt taken on by Enterprise to fund the acquisition, and the extent to which the company refinances or provides supports for Vanguard's existing and future borrowing requirements. Moody's review will also assess the operational and strategic benefits that might result from the acquisition. These potential benefits will be balanced against any increased debt servicing obligations. Moody's said that the proposed acquisition does not affect the ratings of Vanguard. These ratings, which are affirmed, include: * corporate family rating, B1 * probability of default, B1 * senior secured bank credit facility, Ba3, LGD3, 37%; and * speculative grade liquidity, SGL-3. As a result of change of control language in Vanguard's bank agreement, it is likely that these obligations will be repaid if the acquisition is completed. Should this occur, all of Vanguard's ratings would be withdrawn. In the event that some portion of Vanguard's bank debt remains outstanding, the ratings would consider the degree of implicit and explicit support provided by Enterprise for Vanguard's debt. Additionally, should no explicit support be provided and Enterprise not make sufficient financial information regarding Vanguard available upon which a rating opinion could be based, the ratings would be withdrawn. Enterprise Rent-A-Car Company, headquartered in St. Louis, Missouri, is the leading provider of in-town and insurance replacement rental cars in US. ERAC USA Finance Company is a wholly-owned funding vehicle for Enterprise. Vanguard Car Rental USA Holdings Inc., headquartered in Tulsa, Oklahoma, is the third largest general use daily car rental company in North America and operates under the "National" and "Alamo" brand names. VCA ANTECH: Earns $19 Million in Quarter Ended December 31 ---------------------------------------------------------- VCA Antech, Inc. reported financial results for the quarter ended Dec. 31, 2006. Net income for the quarter ended Dec. 31, 2006 increased 13.4% to $19.3 million, compared to a net income of $17.0 million for the quarter ended Dec. 31, 2005. Revenue increased 11.7% to a quarter record of $242.4 million, compared to revenue of $216.9 million for the quarter ended Dec. 31, 2005. Gross profit for the fourth quarter in 2006 increased 18.6% to $61.6 million, compared to a gross profit of $51.9 million for the same period in 2005. Operating income for the 2006 fourth quarter increased 22.2% to $40.7 million, compared to an operating income of $33.3 million for the same quarter in 2005. The company also reported its financial results for the year ended Dec. 31, 2006. Net income for the year ended Dec. 31, 2006 was $105.5 million, compared to a net income of $67.8 million for the same period in 2005. Revenue increased 17.1% to a full year record of $983.3 million, while gross profit increased 19.8% to $270.6 million. Operating income increased 20.9% to $192.5 million. "We had an outstanding quarter," Bob Antin, Chairman and CEO, stated. "Our consolidated revenue increased 11.7% to $242.4 million and our consolidated margins improved over the comparable prior year quarter. Our consolidated gross profit increased 18.6% and our consolidated gross margin increased to 25.4% compared to 23.9% in the comparable prior year quarter. In addition, our consolidated operating income increased 22.2% and our consolidated operating margin increased to 16.8% compared to 15.3% in the comparable prior year quarter. At Dec. 31, 2006, the company's balance sheet showed total assets of $971,957,000, and total liabilities of $541,652,000, resulting to a stockholders' equity of $430,305,000. Equity for the same period last year was $308,751,000. VCA Antech Inc. (NASDAQ:WOOF) owns, operates and manages the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the country. The Company also supplies ultrasound and digital radiography equipment to the veterinary industry * * * Moody's Investors Service assigned a Ba3 long-term corporate family rating to VCA Antech Inc. on May 2004 and a B1 Probability of Default rating on Sept. 2006. Standard and Poor's Ratings Services assigned BB- long-term foreign and local issuer credit ratings on April 2005. VIKING SYSTEMS: Squar Milner Expresses Going Concern Doubt ---------------------------------------------------------- Squar, Milner, Peterson, Miranda & Willamson LLP raised substantial doubt about the ability of Viking Systems, Inc. to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations through Dec. 31, 2006, and working capital deficit at Dec. 31, 2006. The company incurred a net loss of $8.7 million on net sales of $5.6 million for the year ended Dec. 31, 2006, as compared with a net loss of $7.5 million on net sales of $3.8 million for the year ended Dec. 31, 2005. As of Dec. 31, 2006, the company's balance sheet showed total assets of $3.5 million, total current liabilities of $6.7 million, and capital lease obligations of $77,253, resulting to total stockholders' deficit of $11.7 million. The company's December 31 balance sheet also showed strained liquidity with total current assets of $2.5 million available to pay total current liabilities of $6.7 million. The company's accumulated deficit as of Dec. 31, 2006, stood at $18.5 million, an increase over an accumulated deficit of $9.8 million as of Dec. 31, 2005. Since Dec. 31, 2003, Viking System's principal sources of liquidity were funds from the sale of its equity securities and the sale of Convertible Notes. At Dec. 31, 2006, the company had cash and cash equivalents of $440,465. Convertible Notes During 2005 Viking Systems entered into a securities purchase agreement with 23 investors for the issuance of convertible debentures in the amount of about $5.9 million. The notes bore interest at 10%, matured on March 21, 2006, and were convertible into the company's common stock, at the holders' option, at $0.20 per share. Proceeds from the issuance of the convertible notes amounted to about $5.7 million, net of original issue discount of $105,000 and debt issuance costs of $93,750. The notes were subject to certain affirmative and negative covenants and were secured by substantially all of the company's assets. In May, 2006 the company issued 8,000 shares of Series B Preferred stock for gross proceeds of $8 million, and incurred about $436,143 in issuance costs, which were recorded as a discount to the carrying value of the Series B Preferred. Proceeds from the sale of Series B Preferred consisted of about $7.3 million in cash and the conversion of $750,000 of convertible notes. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1c92 About Viking Systems Based in La Jolla, California, Viking Systems, Inc. (OTCBB: VKSY) -- http://www.vikingsystems.com/-- provides 3D endoscopic vision systems to hospitals for minimally invasive surgery. Viking is leveraging that position to become a market leader in bringing integrated solutions to the digital surgical environment. The company's focus is to deliver integrated information, visualization and control solutions to the surgical team, enhancing their capability and performance in MIS and complex surgical procedures. WACHOVIA BANK: Moody's Holds Low-B Ratings on 11 Cert. Classes -------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 27 classes and downgraded the ratings of five classes of Wachovia Bank Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates, Series 2004-C15: * Class A-1, $40,503,307, Fixed, affirmed at Aaa * Class A-1A, $158,918,574, Fixed, affirmed at Aaa * Class A-2, $162,644,000, Fixed, affirmed at Aaa * Class A-3, $150,227,000, Fixed, affirmed at Aaa * Class A-4, $459,608,000, Fixed, affirmed at Aaa * Class X-C, Notional, affirmed at Aaa * Class X-P, Notional, affirmed at Aaa * Class B, $33,205,000, Fixed, affirmed at Aa2 * Class C, $14,438,000, Fixed, affirmed at Aa3 * Class D, $21,656,000, WAC Cap, affirmed at A2 * Class E, $11,549,000, WAC Cap, affirmed at A3 * Class F, $14,438,000, WAC Cap, affirmed at Baa1 * Class G, $12,993,000, WAC Cap, affirmed at Baa2 * Class H, $15,881,000, WAC, affirmed at Baa3 * Class J, $7,219,000, WAC Cap, affirmed at Ba1 * Class K, $4,331,000, WAC Cap, affirmed at Ba2 * Class L, $4,331,000, WAC Cap, affirmed at Ba3 * Class M, $2,888,000, WAC Cap, affirmed at B1 * Class N, $2,887,000, WAC Cap, affirmed at B2 * Class O, $2,887,000, WAC Cap, affirmed at B3 * Class 175WJ-A, $16,000,000, Fixed, downgraded to Ba2 from Ba1 * Class 175WJ-B, $12,700,000, Fixed, downgraded to Ba3 from Ba2 * Class 175WJ-C, $6,300,000, Fixed, downgraded to B1 from Ba3 * Class 175WJ-D, $9,500,000, Fixed, downgraded to B2 from B1 * Class 175WJ-E, $10,500,000, Fixed, downgraded to B3 from B2 * Class 180ML-A $9,700,000, Fixed, affirmed at Baa2 * Class 180ML-B, $7,400,000, Fixed, affirmed at Baa3 * Class 180ML-C $12,350,000, Fixed, affirmed at Ba1 * Class 180ML-D, $15,000,000, Fixed, affirmed at Ba2 * Class 180ML-E $8,000,000, Fixed, affirmed at Ba3 * Class 180ML-F, $7,550,000, Fixed, affirmed at B1 * Class 180ML-G, $9,500,000, Fixed, affirmed at B2 As of the March 16, 2007, distribution date, the transaction's aggregate certificate balance has decreased by approximately 1.4% to $1.26 billion from $1.28 billion at securitization. The Certificates are collateralized by 87 mortgage loans ranging in size from less than 1.0% to 9.9% of the pool, with the top 10 loans representing 51.1% of the pool. The pool includes three shadow rated loans representing 26.4% of the pool. One loan, representing 2.0% of the pool, has defeased and is secured by U.S. Government securities. There have been no losses since securitization and currently there are no loans in special servicing. Fourteen loans, representing 12.1% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2005 and partial-year 2006 operating results for approximately 92.5% and 78.2%, respectively, of the pool. Moody's loan to value ratio for the conduit component is 97.0%, essentially the same as at securitization. Moody's is downgrading Classes 175WJ-A, 175WJ-B, 175WJ-C, 175WJ-D and 175WJ-E due to the poorer performance of the 175 West Jackson Loan, as discussed below. The largest shadow rated loan is the 175 West Jackson Loan at $112.5 million (9.9%), which represents a 50.0% participation interest in a $225.0 million first mortgage loan. The loan is secured by 1.5 million square foot Class A office building located in the Chicago CBD. The building is also encumbered by a $55.0 million B Note, which serves as collateral for non-pooled Classes 175WJ-A, 175WJ-B, 175WJ-C, 175WJ-D and 175WJ-E. The building is one of Chicago's largest buildings, with floor plates that average over 65,000 square feet. As of November 2006 the property was 96.0% leased, compared to 90.0% at securitization. Financial performance has declined since securitization due to decreased rental revenue and increased operating expenses, most specifically real estate taxes. The loan is structured with an initial 3-year interest only period. Moody's current shadow rating of the A and B notes are Ba1 and B3, respectively, compared to Baa3 and B2 at securitization. The second shadow rated loan is the Coastal Grand Mall Loan at $94.9 million (8.4%), which is secured by the borrower's interest in a 882,700 square foot regional mall located in Myrtle Beach, South Carolina. The property is anchored by Dillard's, Sears and Belk, all of which own their own improvements. As of September 2006 the in-line space was 98.0% occupied, compared to 90.2% at securitization. The loan amortizes on a 25-year schedule and has amortized by approximately 4.8% since securitization. The loan sponsor is CBL & Associates Properties, a publicly traded REIT. Moody's current shadow rating is Baa1, compared to Baa2 at securitization. The third shadow rated loan is the 180 Maiden Lane Loan at $93.0 million (8.2%), which represents a 50.0% interest in a $186.0 million first mortgage loan. The loan is secured by a 1.1 million square foot Class A office building located in the Financial District of New York City. The property is 100.0% occupied, the same as at securitization and is anchored by Goldman Sachs Group, Inc. The property is also encumbered by a $69.5 million B Note which serves as collateral for non-pooled Classes 180ML-A, 180ML-B, 180ML-C, 180ML-D, 180ML-E, 180ML-F and 180ML-G. The loan is interest only for its entire 62-month term. Moody's current shadow rating for the A and B notes are Baa1 and B2, respectively, the same as at securitization. The top three conduit exposures represent 14.9% of the outstanding pool balance. The largest conduit exposure is the Gale Portfolio Loan at $72.5 million (6.4%), which is secured by four suburban office properties located in Northern New Jersey. The portfolio totals 574,000 square feet. Occupancy is 90.0%, compared to 95.8% at securitization. The loan sponsors are The Gale Company LLC and SL Green Realty Corporation. The loan is structured with an initial 2-year interest only period. Moody's LTV is 102.3%, essentially the same as at securitization. The second largest conduit exposure is the Deer Valley Village Apartments Loan at $51.2 million (4.5%), which is secured by an 832-unit multifamily property located in Phoenix, Arizona. As of January 2006 the property was 94.0% occupied, essentially the same as at securitization. Performance has been impacted by increased expenses. The loan is interest only for its entire five-year term. Moody's LTV is 106.7%, compared to 103.8% at securitization. The third largest conduit exposure is the IRS Fresno Loan at $46.0 million (4.0%), which is secured by a 180,000 square foot Class A office building located in Fresno, California. The property is 100.0% leased to the Internal Revenue Service under a lease expiring in November 2018. The loan is structured as interest only for its entire five-year term. Moody's LTV is 91.0%, the same as at securitization. The pool's collateral is a mix of office (45.7%), retail (27.5%), multifamily (21.0%), lodging (2.1%), U.S. Government securities (2.0%), industrial and self storage (1.5%) and land (0.2%). The collateral properties are located in 27 states and Washington, D.C. The highest state concentrations are New Jersey (13.8%), Illinois (10.8%), California (10.3%), New York (9.7%) and South Carolina (8.5%). All of the loans are fixed rate. WACHOVIA BANK: Moody's Holds Low-B Ratings on Class K & RC Certs. ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2004-WHALE 4: -- Class X-1, Notional, affirmed at Aaa -- Class J, $33,960,750, affirmed at Baa2 -- Class K, $31,608,000, affirmed at Ba2 -- Class RC, $1,986,932, affirmed at Ba3 As of the March 15, 2007, distribution date, the transaction's aggregate certificate balance has decreased by approximately 93.9% to $67.6 million from $1.1 billion at securitization. Only one loan, the Ritz Carlton New Orleans Loan, remains in the trust. The Ritz Carlton Loan ($65.6 million pooled loan; $2.0 million non-pooled loan) is secured by a mixed use complex consisting of a 527-room Ritz-Carlton Hotel, a 230-room Iberville Suites Hotel, a 20,600 square foot spa, a 23,000 square foot retail area and a 303-car parking garage. The property, which is located on the western border of the French Quarter near the New Orleans CBD, suffered substantial damage in 2005 due to Hurricane Katrina and has only recently reopened. The Ritz-Carlton Hotel opened in December 2006, the Iberville Suites Hotel opened in February 2007 and the spa is expected to reopen in April 2007. The borrower has exercised two of its three one-year extension options and the loan matures in April 2008. The loan benefits from strong sponsorship and business interruption insurance which is expected to last until year-end 2007. The outlook for the recovery of the New Orleans convention and tourism industry still remains uncertain and Moody's will continue to closely monitor this loan's performance. Moody's current shadow rating of the pooled loan is Ba2, the same as at last review. WHITE BIRCH: Moody's Rates Proposed $550 Mil. Senior Loan at B2 --------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to White Birch Paper Company's proposed seven year, $550 million senior secured term loan B due 2014. In addition, Moody's affirmed the company's B2 corporate family rating, stable outlook, and speculative grade liquidity rating of SGL-2. Proceeds from the new term loan will be used to refinance its existing senior secured credit facilities. The rating action reflects the emerging unfavorable trends within the newsprint industry. These trends include a decline in consumption rates for newsprint, weakening prices, and escalating wastepaper, wood chip, and energy costs. White Birch's recently improved operating performance, low cost position, and good liquidity drive the affirmation of the corporate family rating. At the same time, the company's reliance on a single commodity product, the cyclical nature of newsprint prices, acquisition risk, and the challenges continuing to impact the paper sector such as overcapacity, weak demand, elevated costs for raw materials and energy, and significant competitive pressures temper the ratings. In the prior year, Moody's highlighted that White Birch's ratings could improve if the company was successful in reducing debt on a sustainable basis while improving its cost position. Despite favorable cost reduction efforts and improved cash flow in 2006, it is Moody's opinion that significant declines in newsprint pricing, consumption rates, and elevated wastepaper and wood chip costs in 2007 make it unlikely that White Birch will sustain its recent operating performance and significantly reduce debt levels. High ONP costs have been attributable to strong demand in China and shortages in the United States. Also, White Birch's mills located in Quebec are experiencing high wood chip costs as sawmills have been shutting down due to the housing slowdown. Moody's expects that these factors will weaken the company's operating margins in the near term. Upgrades: * White Birch Paper Company -- Senior Secured Revolving Bank Credit Facility, Upgraded to 23-LGD2 from 31-LGD3 Assignments: * White Birch Paper Company -- Senior Secured Bank Credit Facility, Assigned B2 and a range of 49-LGD3 Withdrawals: -- White Birch Paper Company -- 1st Lien Senior Secured Term Loan, Withdrawn, previously Ba3 and a range of 31-LGD3 -- 2nd Lien Sr. Sec. Term Loan, Withdrawn, previously Caa1 and a range of 81--LGD5 White Birch Paper Company, headquartered in Greenwich, Connecticut, is a producer of newsprint and directory paper in North America. WHX CORPORATION: Unit Amends Wachovia & Steel Loan Agreements ------------------------------------------------------------- WHX Corporation reported that its wholly-owned subsidiary Handy & Harman amended its Loan and Security Agreement with Wachovia Bank, National Association, up to $125,000,000. Hand & Harman also amended its Loan Security with Steel Partners II LP. The amendments provided for the pledge of 65% of all outstanding securities of Indiana Tube Danmark A/S, a wholly-owned subsidiary of Handy & Harman International Ltd. and Protechno S.A. a wholly- owned subsidiary of Indiana Tube. The amendments also provided for waivers of certain events of default existing as of March 29, 2007. Steel Partners II L.P. holds 5,029,793 shares of WHX's common stock, representing approximately 50% of the outstanding shares. Warren G. Lichtenstein, Chairman of the Board of WHX, is the sole managing member of the general partner of Steel Partners II L.P. In addition, Glen M. Kassan (Director and Chief Executive Officer of WHX), John Quicke (Director and Vice President of WHX) and Jack L. Howard and Josh Schector (Directors of WHX) are employees of Steel Partners, Ltd., an affiliate of Steel Partners II, L.P. About WHX Corp. Headquartered in New York City, New York, WHX Corporation (Pink Sheets: WXCP.PK) -- http://www.whxcorp.com/-- is a holding company structured to acquire and operate a diverse group of businesses on a decentralized basis. WHX's primary business is Handy & Harman, an industrial manufacturing company servicing the electronic materials, specialty wire and tubing, specialty fasteners and fittings, and precious metals fabrication markets. The company filed for chapter 11 protection on March 7, 2005 (Bankr. S.D.N.Y. Case No. 05-11444). WHX Corp. emerged from bankruptcy on July 29, 2005. At Sept. 30, 2005, the company's balance sheet showed a stockholders' deficit of $24,525,000 compared to a deficit of $96,929,000 in Dec. 31, 2004. WORLD HEART: Chronic Losses Cue PwC to Raise Going Concern Doubt ---------------------------------------------------------------- PricewaterhouseCoopers LLP raised substantial doubt about the ability of World Heart Corporation citing the company's recurring losses after PwC audited World Heart's financial report for the years ended Dec. 31, 2006, and 2005. The company incurred net losses of $20.1 million and $52.8 million for the years ended Dec. 31, 2006, and 2005, respectively. It generated revenues of $8.6 million and $11.6 million for the years 2006 and 2005. The year 2006 was hit negatively by cost of goods sold totaling $10.2 million, which drove gross margin to negative $1.6 million, and total operating expenses of $18.5 million, resulting to an operating loss of $20.1 million. In 2005, the company had a positive gross margin of $3.2 million, resulting to a lower cost of goods sold of $8.5 million. However, the company incurred operating expenses that rose to $55.4 million, due to expenses for acquired in-process research and development of $18.1 million and goodwill impairment of $17.2 million. The company posted an operating loss of $52.3 million in 2005. As of Dec. 31, 2006, the company listed in its balance sheet $20.5 million total assets and $5.8 million total liabilities, resulting to $14.7 million total shareholders' equity. Its accumulated deficit rose to $272.1 million in 2006, from $252 million in 2005. Liquidity At Dec. 31, 2006, World Heart had cash and cash equivalents of $12.2 million, as compared with $10.7 million at Dec. 31, 2005, an increase of $1.5 million. This increase was primarily due to financing activities offset by cash outflows from operations. In the fourth quarter of 2006, the company received net cash of $13.9 million from a private placement of common stock to several of the company's current investors and two new investors. Acquired In-Process R&D During the third quarter of 2005, the company recorded a one-time, non-cash charge of $18.1 million to expense the in-process R&D acquired from MedQuest. It estimated the value of the Levacor Rotary VAD project using an income approach and applied risk- adjusted discount rates to the estimated future revenue and expenses attributable to this technology and the MagLev Plus at the time of the acquisition. The company determined that these projects had no alternative future use and expensed the amounts immediately. There was no acquired in-process R&D expense recorded in 2006. Goodwill Impairment The purchase of Novacor from Edwards in 2000 resulted in the recording of goodwill of $17.2 million. At Dec. 31, 2005, the company determined that the fair value of its goodwill was impaired and, accordingly, recorded a goodwill impairment charge of $17.2 million in the fourth quarter of 2005. The impairment was largely a result of slower than anticipated adoption of the Novacor LVAS product. There was no goodwill impairment in 2006. Restructuring Costs On Nov. 14, 2006, the company disclosed a restructuring and realignment of its business to control spending and better position World Heart to changing market conditions and diminished demand for its first-generation Novacor LVAS. The company reduced its manufacturing program and downsized selling and administrative personnel numbers associated with the Novacor LVAS, although it will continue to support the product for existing patients, and at the medical centers. The restructuring also included a reduction in World Heart's workforce by 41 people, primarily in the related manufacturing and sales departments. Restructuring expenses of about $646,000, including $470,000 severance-related charges and $176,000 related to the disposal of fixed assets, were incurred in the fourth quarter of 2006. At Dec. 31, 2006, $91,000 of the $470,000 severance related charges was disbursed, with the remaining $379,000 included in accounts payable and accrued liabilities. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1cb0 About World Heart Headquartered in Oakland, California, World Heart Corporation (NASDAQ: WHRT, TSX: WHT) -- http://www.worldheart.com/-- develops, produces and sells ventricular assist devices. VADs are mechanical assist devices that supplement the circulatory function of the heart by re-routing blood flow through a mechanical pump allowing for the restoration of normal blood circulation. WORNICK CO: Financial Filing Delay Cues S&P to Junk Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Wornick Co. and its parent, TWC Holdings LLC, including lowering the corporate credit ratings on both entities to 'CCC' from 'CCC+'. In addition, the ratings are placed on CreditWatch with negative implications. "The ratings actions reflect increased uncertainty regarding the company's compliance with covenants in its various debt agreements due to the late filing of annual financial reports, a large goodwill write-down, and a likely 'going concern' qualification from its auditors," said Standard & Poor's credit analyst Christopher DeNicolo. In a recent filing with the SEC stating that the company will be 15 days late in filing its 10-k for 2006, Wornick announced it will be taking a $86.6 million impairment charge against nventory, fixed assets, and goodwill. The charge will result in negative shareholder's equity. The report also stated that the 10-k will include a statement from the firm's auditors expressing substantial doubt that the company can continue as a going concern due to the constrained liquidity position. It is not clear if these events will result in a violation of covenants or an event of default under the company's credit facility or other debt indentures, or if the recent amendment to the credit facility that waived other violations covers these as well. Standard & Poor's will monitor the situation closely and may change the rating or CreditWatch implications as more information becomes available. On March 14, 2007, Wornick assigned its $15 million revolving credit facility to a new lender, amended the facility to waive covenant violations and extend the maturity, and borrowed an additional $10 million term loan. The revolver is fully drawn, but the term loan proceeds could be used to repay a portion of the revolver borrowings or for ongoing working capital requirements. However, cash generation is still weak, albeit improving. The next $6.8 million interest payment is due in July 2007. In January 2007, the firm's equity sponsor, Veritas Capital, made a $5 million equity contribution to provide some additional liquidity. Also in January the CEO left and was replaced by Larry Rose who was CEO at the time of the acquisition of Wornick by Veritas in 2004. The CFO was also removed and has not yet been replaced. Wornick specializes in the production, packaging, and distribution of shelf-life, shelf-stable, and frozen foods in flexible pouches and semi-rigid products. The firm's two main lines of business are military rations (approximately 70% of revenues) and co- manufacturing for leading food brands (30%). The company produces both individual and group rations for the U.S. military. XERIUM TECHNOLOGIES: Earns $3.2 Million in Quarter Ended Dec. 31 ---------------------------------------------------------------- Xerium Technologies Inc. reported net income of $3.2 million in the fourth quarter ended Dec. 31, 2006, compared with net income of $10 million for the fourth quarter of 2005. Charges, on an after tax basis, affecting fourth quarter 2006 net income included environmental expense of $3.1 million, Sarbanes-Oxley compliance costs of $1 million and restructuring and impairment expenses of $2.6 million. Net sales increased to $154.6 million in the fourth quarter of 2006, a 6.9% increase from $144.6 million for the fourth quarter of 2005. Net cash provided by operating activities was $24.6 million for the fourth quarter of 2006, compared to $28.2 million in the same quarter last year. Cash on hand at Dec. 31, 2006 was $16.8 million, compared to $60 million at Dec. 31, 2005. Thomas Gutierrez, chief executive officer of Xerium Technologies, said, "We were pleased with our top-line growth during the fourth quarter of 2006, both sequentially and on a year-over-year basis. Our clothing business generated solid sequential sales growth in most regions, with particular strength in Europe, while our roll covers business also had another strong sales quarter. Capital expenditures for the fourth quarter of 2006 were $8.1 million, compared to $14.4 million for the fourth quarter of 2005. Approximately $3.5 million of capital expenditures in 2006's fourth quarter were directed toward projects designed to support the company's growth objectives, with the remaining $4.6 million used to sustain the company's existing operations and facilities. Net sales for 2006 were $601.4 million, a 3.3% increase from $582.4 million for 2005. Net income was $29.5 million for 2006, compared to a net loss of $2.1 million for 2005. Net cash provided by operating activities was $69.2 million for 2006, compared to $54.7 million in 2005. Net cash provided by operating activities for 2005 reflects IPO-related expenditures of $20.7 million. At Dec. 31, 2006, the company's balance sheet showed $990.7 million in total assets, $874.1 million in total liabilities, and $116.6 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1cac About Xerium Technologies Xerium Technologies Inc. (NYSE: XRM) -- http://xerium.com/-- is a leading global manufacturer and supplier of two types of products used primarily in the production of paper: clothing and roll covers. The company, which operates around the world under a variety of brand names, owns a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production, all designed to optimize performance and reduce operational costs. With 35 manufacturing facilities in 15 countries around the world, Xerium Technologies has approximately 3,800 employees. * * * As reported in the Troubled Company Reporter on Feb. 13, 2007, Moody's Investors Service downgraded Xerium Technologies': Corporate Family Rating, to B2 from B1; Senior Secured Term Loan, to B2 from B1; Senior Secured Revolving Credit Facility, to B2 from B1; and Probability of Default Rating, to B2 from B1 * Edward Zaelke Named Managing Partner of Chadbourne & Parke ------------------------------------------------------------ Edward Zaelke has been named Managing Partner of the international law firm of Chadbourne & Parke LLP' office in Los Angeles. The move comes as part of Chadbourne's substantial expansion of the office in the last six weeks. As the Managing Partner in Los Angeles, Mr. Zaelke will oversee the office's growing practice, which will include wind energy and other areas of renewable energy. Mr. Zaelke is the president of the American Wind Energy Association and headed the Renewable Energy Practice Group at his former law firm, Morgan, Lewis & Bockius. "Ed is a strong leader with great visibility in renewable energy, which is a growth area for the Firm," Chadbourne Managing Partner Charles O'Neill said. Mr. Zaelke, 48, succeeds Jay Henneberry, a Los Angeles partner who, after 13 years of leading the office, has decided to concentrate on his litigation practice. "Jay has done an outstanding job in managing the Los Angeles office over the past 13 years," said Mr. O'Neill. "The entire Firm is very grateful for his efforts and appreciative of his success." "Chadbourne is pursuing a West Coast strategy of smart, strategic growth that focuses on the 'sweet spot' of our practice areas here: renewable energy and litigation," Mr. Zaelke said. "I am delighted to help put this strategy into action." In addition to Mr. Zaelke, partners Adam Umanoff and Thomas Dupuis and a team of associates have joined Chadbourne in Los Angeles from Morgan Lewis. They bring broad experience in wind and renewable energy matters. The recent wind hires are the first step in the Los Angeles office's expansion, which is aimed at adding lawyers in other practice areas that complement those in the Firm's other offices. Chadbourne's Los Angeles office opened in 1987 and serves as the West Coast arm of the Firm's renewable energy, project finance, litigation, products liability, real estate, tax, restructuring, cross-border transaction and insurance and reinsurance practices. Lawyers in this office have represented companies in a variety of complex business litigations, involving commercial and securities fraud and government-contract matters. The products liability practice encompasses all aspects of litigation in federal and state courts across the country. About Chadbourne & Parke LLP Chadbourne & Parke LLP -- http://www.chadbourne.com/-- an international law firm headquartered in New York City, provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, energy, communications and technology, commercial and products liability litigation, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, employment law and ERISA, trusts and estates and government contract matters. Major geographical areas of concentration include Central and Eastern Europe, Russia and the CIS, and Latin America. The Firm has offices in New York, Washington, DC, Los Angeles, Houston, Moscow, St. Petersburg, Warsaw (through a Polish partnership), Kyiv, Almaty, Tashkent, Beijing, and a multinational partnership, Chadbourne & Parke, in London. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Cherry A. Soriano-Baaclo, Melvin C. Tabao, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2007. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***